Here's Why Your Car Insurance Rate Changed

If you've ever opened an insurance renewal letter and been, well, confused — trust us, we get it. We've all been there, too. And, here at Root, we get lots of questions about why car insurance rates fluctuate.

So let's just pop the hood on this rate thing and take a look, shall we?

Here are the big reasons your price fluctuates:

Changes on your end.

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There’s a long list of changes you make which can affect the price you pay for car insurance. And they all pretty much make sense, when you think about it. Let’s take a look at a few:

  1. You moved. Where you live is a pretty good indicator of where you drive, and certain areas present more risk than other areas. If you move to a place where few people get into accidents and not many cars are stolen, there’s a good chance your car insurance rate will go down (assuming that everything else stays the same). On the other hand, if you move to a place where there are more car accidents, you’ll generally pay a higher rate. Pretty straightforward.

    And if you move to a different state? That's hard to predict. Each state regulates insurance differently and the difference in cost can vary widely between states. (Cross your fingers! Maybe you’ll get a lower rate.)

  2. Your driving record changed. At Root, your driving score is the #1 factor in the price you pay for car insurance. But it would be pretty silly of us to completely ignore driving history. And if you get in an accident and collect three speeding tickets in six months, well...let’s just say no insurance company could look away from that. It wouldn’t be fair or responsible.

    The good news? Bad driving memories disappear from driving records after 3-5 years, and when that happens your insurance rate will likely change again — this time, in a better direction.

  3. You added, removed, or changed a vehicle on your policy. Quick quiz: which of the following vehicles costs more to replace?

    A) - A 1987 Ford Focus, rusty around the rims
    B) - A 2018 Ferrari, shiny and fresh from the dealership

    Yeah, it’s a silly question. But it illustrates an important point: different vehicles cost different amounts of money to replace or repair. The amount is often hard to predict, so just know that when you change your vehicle lineup on your policy, the price of your insurance will almost certainly be affected.

    (Shopping around for cars? If you’re a Root member, the app makes it simple to check in real time how your rate will be affected by a different vehicle — before you purchase. Pretty nice.)

  4. You changed the drivers on your policy. This one is obvious. The more people on your policy, the more money you will pay to cover everyone.

    This is a good place to note, though, that the other people on your policy can affect your rate in other ways. For example, if you drove perfectly this policy term but your sixteen-year-old son got two speeding tickets — yeah, you’ll probably see that in your insurance renewal rate.


Okay! Let's move on to...

Changes around you.

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You’ve probably noticed that the world never stays the same. And all those changes around us — the changes in the market — can have a significant effect on your car insurance rate.

Let’s take a look at some of those factors.

  1. The amount of accidents around you goes up or down. Think about it this way: Even if you’re the best driver in the world, someone can crash into you. Even if you’re the most trustworthy person in the world, someone could steal your car. And if the rates for accident and theft go up or down in your area, your insurance rates will go up or down, too.

  2. The weather around you changes. Did your state bird warn of an unusually heavy storm season? Are scientists calling for an earthquake in the next few days? (Sorry.)

    Bad jokes aside, weather and natural disaster risk changes over time. And if your insurance company expects that it will have to pay for a lot of flood damage in the near future, you can definitely expect your rates to go up.

  3. The cars around you get more or less expensive to repair. Depending on where you live, you might notice an increase in electric cars and cars with autonomous technology. While having safer, energy-efficient cars on the road is mostly a good thing, the unfortunate side is that those cars are generally more expensive to repair — and the added expense can drive up your insurance rate.

    On the flip side? Some cars get less expensive to repair as time goes on and repair technology gets better. If you live in an area where this lowers insurance cost, well...lucky you!


Okay, we’ve talked about rate fluctuations based on changes in your situation and changes in the market. Now let’s talk about...

Changes on our end.

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Running an insurance company sustainably is a tricky job. Insurance companies must collect enough money from policies to cover the cost of claims and the cost of running a business, without setting prices too high. It gets even more complicated for Root, because we’re also committed to fairness — the best rates for the best drivers. We’re dedicated to giving our good drivers the lowest rates possible.

But to do that well — and in a way which keeps us healthy as a company — we have to keep a sharp eye on our data and how our models perform over time. Our actuaries (the people who do tricky insurance calculations) are knee-deep in the numbers every day, creating, checking, and double-checking our actuarial tables.

Once we create those tables — which are really just predictions of how many claims we’ll pay in a given amount of time — we constantly monitor them to ensure that they’re accurate. If we see areas where a prediction doesn’t quite align with reality, we act. If it looks like we priced too high in certain areas, we lower prices. If it’s clear that we’re underpricing, we adjust prices upward. It’s as simple as that.

It’s also normal. Insurance risk is a constantly evolving calculation with many, many factors, which is why insurance rates are never permanent. Your rate will fluctuate for as long as you have insurance. Sometimes those fluctuations will be big. Other times, you won’t even notice.

The important thing to note here is that car insurance rate changes happen, they happen constantly, and they happen for a reason.

Which brings us to our promise to you:

We are 100% committed to bringing you the fairest rates possible.

We were founded on the relentless pursuit of fairness. That means that we will stop at nothing to ensure that our rates are the most accurate in the business. We will always do our utmost to ensure you have the lowest price we can sustainably offer.

That doesn’t mean that your rate will never change — that’s not how insurance works — but it does mean that it will never change without cause. When your rate raises or lowers, you can be sure that we’ve done all the calculations and are giving you the best price we can offer while being responsible as a company.

What’s more? You can also be sure that we’re always keeping an eye on things and using the best technology and data available to make both our insurance and our prices the best in the business.

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