- Root Insurance will cease to consider credit scores on its insurance pricing models by the year 2025
- Root said it wants to make auto insurance “fair” by basing rates on driving behavior
- Credit scoring is used by the 15 biggest auto insurers in the country
An auto insurance company based in Columbus, Ohio, is taking a stance on what it claims is an unfair practice in the industry. Root Insurance, which operates in 30 states, said it will cease to consider credit scores on its insurance pricing models by the year 2025.
“For decades, the car insurance industry has used credit score as a major factor in calculating rates,” Root stated. “By basing rates on demographic factors like occupation, education, and credit score, the traditional car insurance industry has long relied on unfair, discriminatory biases in its pricing practices.”
Such practices, Root explained, “unfairly penalize” historically under-resourced communities,