It is a cloying and oft-repeated phrase that technology has the power to transform everything. A startup insurance company, of all things, offers a peek at just how technology might change that old-line industry.
The company is called Root, and it is located in the startup hotbed of Columbus, Ohio. In fact, it offers auto insurance only in that Midwestern state for now, and you must have an Apple (AAPL) iPhone and have a good driving record to buy its policies. As Fortune’s Kirsten Korosec explains, the company takes several novel approaches to rating its policyholders. It utilizes the GPS chips in phones that customers use while on test drives to decide if someone is a good risk.
Speed, mileage, routes and the like contribute a portrait of safety, as Root says in its own fascinating FAQ section. “In order to accurately determine your quote, we run your ambient driving data against our predictive algorithms to determine your specific level of risk,” the company writes. “It considers hundreds of factors, such as mileage driven, hard-braking, dangerous routes, driving regularity, time of day, and much more.” It is sort of like the Social Finance of car insurance.
Get Data Sheet, Fortune’s technology newsletter, where this essay originated.
Root’s latest innovation is really clever. It is offering discounts to users of Tesla’s (TSLA) Autopilot driver-assistance technology and justifies the move based on federal data that demonstrates lower crash rates as a result of its use.
It’s tough to argue. This technology thing is really pretty cool.
***
I want to wish a hearty congratulations to my friend and colleague Clifton Leaf on his promotion this morning to Editor in Chief of Fortune. Cliff was one of my first editors when I joined the staff a long time ago. He’s a noted author; a demanding and caring editor; the impresario of our newest successful conference, Brainstorm Health; the tireless lead writer of the Brainstorm Health Daily newsletter; and, this is a non-trivial comment, an all-around good guy. On top of that, any organization is gleeful when one of its own gets the top job. Congrats again Cliff!
