Loop Auto Insurance is seeking to change the way auto insurance policies are priced. The car insurance startup does not yet offer policies, but already has a waitlist of over 30,000 people. Bankrate looked into Loop’s innovative pricing model and company structure to help you decide if the new car insurance company could be a good fit for you.
Loop uses a combination of telematics data and AI to price policies based on driving habits and road safety, rather than using mostly demographics data — like your credit rating, education level and ZIP code — to price policies. Loop contends that this will be a more fair pricing model and will help prevent unintended bias when it comes to car insurance rates.
Loop car insurance
Loop has set itself apart from other auto insurance companies in a number of ways, despite not yet offering policies.
Loop is a B Corp, which means that the company is focused on more than just profits. Loop’s mission is to provide fair insurance pricing to everyone, regardless of demographics. To do this, the company plans to use an innovative pricing model which uses telematics and road safety data. The auto insurance startup seeks to eliminate some traditional pricing metrics, like credit rating, education level and ZIP code, which have historically been used to demonstrate the likelihood of a policyholder filing a claim. However, several states have begun mitigating or banning the use of such metrics, as they could potentially contribute to structural bias within the insurance industry.
Loop is set to launch its auto insurance product in 2021 in Texas (some sources say as early as mid-August). Several other states could follow, including Maryland, Oregon and New York.
Types of coverage
Because Loop auto insurance is not yet available for purchase, the coverages that it offers are not known. However, the company will very likely offer standard auto insurance coverages, including bodily injury liability, property damage liability, comprehensive coverage and collision coverage. Depending on the state, personal injury protection (PIP) or medical payments coverage will also likely be available. Optional coverages, including roadside assistance, car rental coverage and ridesharing insurance, could be offered, but we won’t know until the company begins giving quotes.
When Loop does launch, customers will be able to get quotes through the app. The app will use driving habit data, road safety data and factors like your state, age and driving history to rate your policy. While other companies use telematics as a discount feature, Loop uses it as one of its main pricing metrics. The app is also purported to monitor your driving behavior, give you safety tips and could even help divert you to safer roads.
Cost of Loop car insurance
Because Loop auto insurance is not yet being sold, average premiums are not available. However, the company was founded on the belief that car insurance should be priced differently and that prices should be honest and straightforward. Bankrate will share rate information as soon as it becomes available.
Loop ratings, reviews, customer satisfaction and complaints
Loop has not been reviewed by J.D. Power for customer satisfaction or Standard & Poor’s (S&P) for financial strength yet, since coverage is not yet available. However, Loop closed a multi-year reinsurance agreement on August 16, 2021 with a reinsurance company that has an A+ AM Best financial strength rating.
As the company begins to offer coverage, more reviews and ratings may become available.
Reasons Loop insurance could be a good option
Loop auto insurance is exploring a new kind of pricing that could be attractive to consumers who want car insurance that is based on driving and not personal factors. For customers who appreciate technology and enjoy handling their insurance on a mobile device, Loop could be an innovative and groundbreaking auto insurance provider. The company’s B Corp designation could also appeal to policyholders who want to support businesses that give back to the communities they serve.
However, Loop may not be the right fit for customers who prefer a more traditional way of handling their financial products. Loop does not have local offices and it is unclear if there will be a toll-free contact phone number or if everything will be handled through the app.
How to sign up for Loop car insurance
While you can’t buy Loop car insurance yet, the company is set to launch in the remainder of 2021. Loop will first launch in Texas and is aiming to spread to Maryland, Oregon and New York, among other states. If you live in one of the first states where Loop is offered, you may be able to get a quote within a few months.
If you are interested in staying in the loop, you can join the company’s waitlist. Waitlist members will have access to the app before it goes live.
Frequently asked questions
How do I get a quote from Loop?
Loop auto insurance is not yet available to purchase, but once it is, you will need to download the app to obtain a quote. Loop’s technology will use real-time data, including road safety information and driving habits, to determine your rate.
How do I file a claim with Loop?
Loop’s website shows a snapshot of a claim-filing screen on its app, so claims will likely be filed through the app. Loop says that claims could be paid in as little as seven minutes. At this point, there is no information regarding a toll-free claim phone number or online claim filing system.
Why does Loop rate policies differently?
Loop uses data science to rate its policies rather than traditional rating metrics like a driver’s credit tier, level of education and ZIP code. While these metrics can be used to predict the likelihood of a policyholder filing a claim, Loop feels that they could also contribute to a bias against some communities. Loop seeks to focus more on driving behavior and road safety in its pricing model.