Today when you apply for car insurance, carriers will ask a long series of questions. Typically they ask - where do you live? Do you own your home? What kind of car do you drive? Other data they purchase about you, without asking. With few exceptions, carriers pull your credit score and will check with the DMV to see if you have points on your license.
Ever wonder why?
A carrier asks so many questions to build an algorithm that predicts whether you are a person who is likely to file a claim. Depending on your answer to these questions*, the algorithm may qualify you for a low or high rate.
* How insurers weigh these factors and come up with these rates is sometimes public information, but unless you have a degree in math, impossible to interpret. If you pick up the phone and ask your insurer to explain why you got the rate you did, they can’t explain it.
The bad news is, the questions are rigged. The best rates and the biggest discounts are reserved for people that own houses, boats, and luxury vehicles. Insurers also pick proxy variables to rate drivers that tilt the scale even further. For example, if you get a college degree, you are categorized as a better risk. And if you went to Harvard, you can get even lower rates. These factors are likely a better signal of your likelihood of owning a home, boat, or luxury vehicle than your crash risk, and a funnel for upsells, like a home and auto bundle.
But we all kind of knew insurance felt like a scam and that rates aren’t fair. Loop will fix this.
We believe the best rates should go to drivers based on their merit. And, the way to reset the playing field is with better data.
Loop uses open, public data paired with your location from your cell phone to measure whether you drive on unsafe roads. Location-based data helps us deliver on that promise by measuring your personal risk of a car crash directly. No more credit-based car insurance nonsense or homeowners discount.
When you share your location with Loop, the first thing we do is share it back, augmented with information about where you’re most exposed to crash risks. Because, why wouldn’t we tell you if you’re on a crash-prone road, especially if it helps to keep you safe?
Good insurance shouldn’t be reserved for the privileged few, it should be fair. And selling insurance shouldn’t be about making money for the insurance company, it should be about taking care of people. If data can help usher in a new era of fair pricing and a high quality experience, we hope you’ll share your data with Loop.