New Car Insurance Companies That Are Changing the Industry
You don’t often see “exciting” and “car insurance” in the same sentence… but that’s about to change. Several companies are disrupting the car-insurance industry by coming up with new ways to make buying insurance easier, cheaper and more personalized.
Why is this exciting? It benefits you, and everyone else who drives a car! That’s because when companies compete, prices go down.
Here’s our guide to four car insurance companies that are disrupting the marketplace with tech-based approaches. Not all of these insurance options are available in every state, however. If you want to see the cheapest car insurance options for your state, all you have to do is compare personalized car insurance quotes on Compare.com.
What Is Root Insurance?
Root Insurance in 10 words: Cheap insurance for good drivers, no insurance for bad drivers.
Root Insurance takes telematics to the next level. Where conventional insurance companies offer you a small discount for letting them track your driving habits, Root Insurance offers you a policy after the company has assessed your driving habits with its app. Its tech is more sophisticated, too! Root doesn’t just measure your acceleration, speed and braking, like other companies do; it also looks for subtle indicators that you’re engaging in risky driving behavior, such as excessive lane changing, tailgating, and texting while driving.
“Since we don’t insure the 30% of people that cause most of the accidents, you don’t have to subsidize them,” the company says. Root Insurance says many of its customers save 52 percent (or more) off their old insurance rate; the average annual savings is $1,187. There are no agents — quotes are issued by an artificial intelligence algorithm. You receive your quote, buy insurance and file claims via the app. Roadside assistance is included in your policy.
You should try Root Insurance if you: know you’re a careful driver and are willing to be tracked in order to save money.
Clearcover Insurance in 10 words: Tech-y insurance that uses smart marketing to offer low rates.
Like Root Insurance, the insurance startup Clearcover promises to deliver really cheap insurance rates by using artificial intelligence. Unlike Root, Clearcover doesn’t require customers to have their driving tracked and measured. Instead, the company saves money by ditching all the extras: “We believed that if we built an insurance company that used advanced technology to seamlessly provide great car insurance in places it mattered, we’d be able to offer what people really wanted — better coverage at significantly lower prices.” said Clearcover co-founder and CEO Kyle Nakatsuji. Basically, he’s saying, a big chunk of your car insurance premium is paying the salary of Progressive’s Flo or Allstate’s Mayhem.
Clearcover uses AI to precisely target its marketing and give you automated insurance quotes. You can file claims directly on the app — just describe what happened, take some photos of the damage and submit the claim for processing. You can still speak to a live person if you need help.
Clearcover car insurance offers “Alternate Transportation Coverage” instead of traditional rental-car coverage. So if your ride’s being repaired after an accident, you get cash to spend on any kind of transportation: bus, ridesharing, even scooters. Another bonus: if you drive a vehicle with advanced safety or self-driving features, you get lower rates.
You should try Clearcover car insurance if you: want to streamline your insurance and save money doing it.
Say Insurance in 10 words: Giving people power over their policies by simplifying car insurance.
Car insurance can be so complicated that it makes your eyes cross. It can be super frustrating, too — why did your insurance rates jump up by $100 for no good reason?
Say Insurance promises to take some of the mystery and frustration out of buying insurance. “We’re letting them know what they can do to reduce their rates, minimize their risk and have more control of their policy,” the company says.
One cool thing that Say Insurance does is reveal your insurance score. This is a number, similar to a credit score, that many insurers use to set your rates, supposedly because it can predict how likely you are to get into an accident. Your insurance score has nothing to do with your driving history or your car. It’s based on your financial history — things like late vs. on-time payments, the amount of debt you’ve had, and how long you’ve had certain accounts. The lowest insurance score is 220, and the highest is 997.
Unlike your credit score, your insurance score has been a closely guarded secret. Until now! When you get a quote with Say Insurance, the company shows you that score, so you know where you stand. Not happy with your score? If you buy a policy from Say, the company will pad your score by 50 points each year (in its own premium calculations) until you reach the max of 997. Say Insurance is also transparent about the discounts it offers, such as a 10% discount for purchasing a policy at least 7 days before your old one expires.
You should try Say Insurance if you: like to have control over your finances and want to work to improve your insurance score.
Metromile in 10 words: The fewer miles you drive, the more you can save.
Most insurance companies quote you a flat rate per month for insurance. Metromile works differently. Every month, you pay a low base rate (which stays the same) plus a per-mile rate for the miles driven in the past month. Both rates may be determined by your state of residence, your age, your credit history, your driving history, and the length of your prior insurance, among other factors.
Instead of an app, Metromile tracks your driving with a small device that plugs into your car. (You can turn off the device’s location tracking feature, if you want.) While the amount you pay each month will go up or down, depending on how much you drive, you won’t be charged for miles driven above 250 per day (or 150 in New Jersey). Metromile says its average customer — someone who drives around 5,000 miles annually — saves $611 per year.
Metromile has a few sweet perks, too! For instance, Metromile includes pet injury coverage with collision and comprehensive coverage on all policies (except in IL or VA) at no additional charge. This coverage pays up to $1,000 for medical care if your dog or cat is injured as a result of a covered claim. Also, you can use Metromile’s app to keep track of your car’s maintenance needs — it can even tell you what’s going on when the Check Engine light comes on.
You should try Metromile pay-per-mile insurance if you: work from home, have a short commute or otherwise don’t drive a lot.