Auto insurance companies are experimenting with charging drivers based on their actual driving rather than the typical bevy of statistics like driving history, location and age.

The technology is called usage-based insurance. Root Insurance operates in 20 states around the Karsten Company, with plans to expand service to all 50 states by Auto insurance incumbents are also experimenting with usage-based insurance, fuelled by the ubiquity of smartphones and availability of telematics devices. Progressive Insurancefor instance, offers its customers discounts based on their driving through its "Snapshot" program.

James Haas, business leader of usage-based insurance at Progressive, said it uses an app that tracks your driving and offers discounts and rewards for safe driving. According to Progressive's "Snapshot" privacy statement, the collected data is also used to calculate an insurance quote or the rate the driver will pay when a policy renews.

Users of Progressive's "Snapshot" app will receive a first-term discount and a personalized insurance premium afterwards based on their driving habits, according to the "Snapshot" terms and conditions.

Root Insurance has a similar approach. Download their app onto your smartphone, turn on location tracking, upload a picture of your license, and off you go. No need to log trips, sign on, or open the app while driving, or at all. The app runs quietly in the background, passively absorbing all sorts of data about your driving skills. Where it differs from Progressive is in the financial incentive.

Root doesn't offer discounts over time as it gather a driver's history, or use the history for renewal quotes. After a two-week initial trial period, out pops an insurance premium, and then the user no longer needs to keep the app running. But there's a catch. To build a profile, the app continuously sits in the background watching you. The persistent monitoring is necessary to build Root Insurance Company Phone Number complete profile of a user, said Dan Manges, chief technology officer of Root Insurance.

The company says it tries to be as upfront as possible that the app will monitor you at all times and can't be switched off without disrupting the trial period. Users can also manually disable its tracking features once the trial period ends, and while an untouched app will continue to gather data, Manges says it is used only to further refine their algorithm rather than re-rate an individual customer's premiums. The model, like many in the technology sector, creates a data-based bargain for the consumer — but with the added price of privacy concerns.

Privacy experts already have uncovered consumer fears. Inthe Pew Research Center conducted a study on how Americans approach privacyasking if Americans were willing to allow insurers to monitor driving habits and, importantly, location, in exchange for a discount. Pew found that many Americans are willing to "share personal information in exchange for tangible benefits," for instance, a discount on insurance, but Pew found that location was an important, and deeply personal, part of Champion Blower And Forge Company lives.

Forty-five percent deemed the tradeoff unacceptable, with only 37 percent of respondents finding it acceptable. An additional 16 percent said it would depend on the circumstances. Other experts reached similar conclusions. According to Root Insurance's privacy policy, the company says it will not sell or rent collected information "to anyone. There are doubts about whether a phone is accurate or reliable enough to collect data to assess insurance premiums, said automotive services expert Colin Bird, senior analyst at IHS Markit.

Root Insurance says this is a daunting challenge. Root's persistent monitoring of drivers has led to user complaints. Get in a taxi and it might start logging your Uber driver's crazy drifting, dinging your score accordingly. Take a cross-country flight and the app will record your supercar-like acceleration.

I run on a treadmill 2. The airplane is taxiing before takeoff and after landing 3. I am in the passenger seat when my friend is driving," wrote a Atlas Pallet Company named Venkat Raghavan. Root Insurance does not use this method. Others, like Progressive Insurance's "Snapshot" program, allow users to categorize Root Insurance Company Phone Number trips if they weren't the driver. In fact, component suppliers like ST make many different grades of accelerometers, including two separate categories for automotive applications and for consumer gadgets.

If usage-based insurance becomes common, customers outside of the pool of users could face increasingly high premiums for not giving up their privacy. Root Insurance says its customers can get rates up to 52 percent lower than their previous insurers. But while there's the danger that it will hit underserved groups the hardest, offsetting that is the existing data set on which insurance can be priced. Traditional auto insurance has been around for so long actuaries are familiar with all possible risks and can price them into quotes Best Asset Search Company. Yeah," Verdi says.

I'm skeptical. We have a regime that allows people already to predict risk," Verdi said. All Rights Reserved. Data also provided by. Skip Navigation. Markets Pre-Markets U. Key Points. Usage-based auto insurance, which tracks the way drivers operate in a car, can lead to lower quotes and policy premiums.

Root Insurance offers an app that tracks drivers and claims to save as much as 50 percent on average car insurance rates. There are privacy concerns, though, and tracking problems, as Root's app will follow the driver even when they are a passenger in someone else's car, or even on a plane.

The Root Insurance usage-based app tracks a Younger Auction Company for a trial period before offering an auto insurance premium quote. VIDEO Tim Ponant Company is saying privacy is a fundamental human right, says Sree Sreenivasan. There is also a bleaker underside to usage-based insurance.

Other experts say there is no cause for concern — at least not yet. Virgin Galactic taking tourists to space in 'months rather than years'. Is the future of vacations subscription based?

The futuristic train that's complete with an on-board gym. News Tips Got a confidential news tip? We want to hear from you. Get In Touch. CNBC Newsletters. Market Data Terms of Use and Disclaimers.

Root Auto Insurance Reviews (Feb. 2020) -

What benefits does Root Auto Insurance offer? Root Auto Insurance offers the following benefits to its customers: 24/7 Phone Availability: Customer service is staffed around the clock. Digital Claims Reporting: Never fax or mail a document again. What discounts does Root Auto Insurance offer? When you ask for a quote with Root Auto Insurance, make sure you ask for all the discounts you qualify for.66%(3)…