0001628280-24-005906 | 10-K | XBRL Viewer

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INCOME TAXES - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Deferred tax assets:
Unpaid losses and loss adjustment expenses	$ 2.1	$ 1.9
Unearned premium reserves	10.0	2.7
Disallowed interest carryforward	19.4	16.5
Deferred compensation	7.3	6.1
Stock and warrant compensation	10.2	9.5
Other	6.0	7.8
State net operating loss carryforward	27.9	17.4
Net operating loss carryforward	280.6	266.4
Gross deferred assets	363.5	328.3
Less valuation allowance	(356.4)	(322.3)
Total deferred tax assets, less valuation allowance	7.1	6.0
Deferred tax liabilities:
Research and experimental expenditures	1.1	2.0
Fixed assets	0.7	1.3
Deferred policy acquisition costs	3.8	1.5
Intangible assets	0.4	0.3
Investments	1.0	0.8
Other	0.1	0.1
Deferred tax liabilities	7.1	6.0
Net deferred tax asset	$ 0.0	$ 0.0

INVESTMENTS - Net Investment Income (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Net Investment Income [Line Items]
Total	$ 32.8	$ 8.1	$ 7.3
Investment expense	(2.6)	(1.9)	(2.3)
Net investment income	30.2	6.2	5.0
Interest on bonds
Net Investment Income [Line Items]
Total	4.8	2.4	2.4
Interest on deposits and cash equivalents
Net Investment Income [Line Items]
Total	28.0	5.7	1.1
Other investments
Net Investment Income [Line Items]
Total	$ 0.0	$ 0.0	$ 3.8

FAIR VALUE OF FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

The following tables provide information about our financial assets measured and reported at fair value as of December 31, 2023 and 2022:


	2023
	Level 1		Level 2		Level 3		Total Fair Value
	(dollars in millions)
Assets
Fixed maturities:
U.S. Treasury securities and agencies	$	13.3	$	1.3	$	—	$	14.6
Municipal securities	—		24.1		—		24.1
Corporate debt securities	—		65.2		—		65.2
Residential mortgage-backed securities	—		11.9		—		11.9
Commercial mortgage-backed securities	—		29.8		—		29.8
Other debt obligations	—		20.3		—		20.3
Total fixed maturities	13.3		152.6		—		165.9
Short-term investments	0.9		—		—		0.9
Cash equivalents	439.6		—		—		439.6
Total assets at fair value	$	453.8	$	152.6	$	—	$	606.4

	2022
	Level 1		Level 2		Level 3		Total Fair Value
	(dollars in millions)
Assets
Fixed maturities:
U.S. Treasury securities and agencies	$	9.2	$	1.8	$	—	$	11.0
Municipal securities	—		20.2		—		20.2
Corporate debt securities	—		57.8		—		57.8
Residential mortgage-backed securities	—		5.2		—		5.2
Commercial mortgage-backed securities	—		23.2		—		23.2
Other debt obligations	—		11.0		—		11.0
Total fixed maturities	9.2		119.2		—		128.4
Short-term investments	—		0.4		—		0.4
Cash equivalents	487.3		—		—		487.3
Total assets at fair value	$	496.5	$	119.6	$	—	$	616.1

We estimate the fair value of all our different classes of Level 2 fixed maturities and short-term investments by using quoted prices from a combination of an independent pricing vendor or broker/dealer, pricing models, quoted prices of securities with similar characteristics or discounted cash flows. All significant inputs were observable in the active markets.

Private Equity Investments Measured at Fair Value on a Non-Recurring Basis

Private equity investments that have been remeasured during the period due to an observable event or impairment are classified within Level 3 in the fair value hierarchy because we estimate the value based on valuation methods which may include a combination of the observable transaction price at the transaction date and other

unobservable inputs including volatility, rights, and obligations of the investments we hold. See Note 3, “Investments,” for further information on our private equity investments.

Fair Value of Long-Term Debt

The carrying amount of long-term debt is recorded at the unpaid balance, net of discount and debt issuance costs. The fair value of outstanding long-term debt as of December 31, 2023 was classified within Level 2 of the fair value hierarchy. The fair value was based on a model referencing observable interest rates and spreads to project and discount cash flows to present value. As of December 31, 2023 and 2022, the carrying amounts and fair values of these financial instruments were as follows:


	Carrying Amount as of December 31, 2023		Estimated Fair Value as of December 31, 2023		Carrying Amount as of December 31, 2022		Estimated Fair Value as of December 31, 2022
	(dollars in millions)
Long-term debt	$	299.0	$	305.2	$	295.4	$	309.7

The carrying amounts of other short-term financial instruments approximates their fair value due to their short-term nature.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

INVESTMENTS - Unrealized Losses (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items]
Less than 12 months, fair value	$ 36.1	$ 91.1
Less than 12 months, unrealized loss	(0.1)	(3.2)
12 months or more, fair value	72.3	30.3
12 months or more, unrealized loss	(3.1)	(2.7)
Total, fair value	108.4	121.4
Total, unrealized loss	(3.2)	(5.9)
U.S. Treasury securities and agencies
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items]
Less than 12 months, fair value	1.7	6.9
Less than 12 months, unrealized loss	0.0	(0.1)
12 months or more, fair value	2.4	4.1
12 months or more, unrealized loss	(0.1)	(0.2)
Total, fair value	4.1	11.0
Total, unrealized loss	(0.1)	(0.3)
Municipal securities
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items]
Less than 12 months, fair value	3.1	11.5
Less than 12 months, unrealized loss	0.0	(0.5)
12 months or more, fair value	15.1	8.2
12 months or more, unrealized loss	(0.8)	(0.7)
Total, fair value	18.2	19.7
Total, unrealized loss	(0.8)	(1.2)
Corporate debt securities
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items]
Less than 12 months, fair value	13.4	45.3
Less than 12 months, unrealized loss	0.0	(1.6)
12 months or more, fair value	35.1	11.5
12 months or more, unrealized loss	(1.3)	(1.1)
Total, fair value	48.5	56.8
Total, unrealized loss	(1.3)	(2.7)
Residential mortgage-backed securities
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items]
Less than 12 months, fair value	4.1	2.2
Less than 12 months, unrealized loss	0.0	0.0
12 months or more, fair value	1.9	1.9
12 months or more, unrealized loss	(0.2)	(0.3)
Total, fair value	6.0	4.1
Total, unrealized loss	(0.2)	(0.3)
Commercial mortgage-backed securities
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items]
Less than 12 months, fair value	9.1	18.3
Less than 12 months, unrealized loss	(0.1)	(0.8)
12 months or more, fair value	13.4	4.6
12 months or more, unrealized loss	(0.6)	(0.4)
Total, fair value	22.5	22.9
Total, unrealized loss	(0.7)	(1.2)
Other debt obligations
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items]
Less than 12 months, fair value	4.4	6.8
Less than 12 months, unrealized loss	0.0	(0.2)
12 months or more, fair value	4.4	0.0
12 months or more, unrealized loss	(0.1)	0.0
Total, fair value	8.8	6.8
Total, unrealized loss	(0.1)	(0.2)
Total fixed maturities
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items]
Less than 12 months, fair value	35.8	91.0
Less than 12 months, unrealized loss	(0.1)	(3.2)
12 months or more, fair value	72.3	30.3
12 months or more, unrealized loss	(3.1)	(2.7)
Total, fair value	108.1	121.3
Total, unrealized loss	(3.2)	(5.9)
Short-term investments
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items]
Less than 12 months, fair value	0.3	0.1
Less than 12 months, unrealized loss	0.0	0.0
12 months or more, fair value	0.0	0.0
12 months or more, unrealized loss	0.0	0.0
Total, fair value	0.3	0.1
Total, unrealized loss	$ 0.0	$ 0.0

LOSS PER SHARE - Schedule of Anti-Dilutive Securities (Details) - shares shares in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities (in shares)	10.6	9.9	9.0
Options to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities (in shares)	0.1	0.2	0.4
Nonvested shares subject to repurchase
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities (in shares)	0.1	0.1	0.1
RSUs and PSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities (in shares)	1.9	1.1	0.5
Redeemable convertible preferred stock (as converted to common stock)
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities (in shares)	0.8	0.8	0.8
Warrants to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities (in shares)	7.7	7.7	7.2

INVESTMENTS - Gross and Net Realized Gains and Losses (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Investments, Debt and Equity Securities [Abstract]
Realized gains on investments	$ 0.0	$ 1.2	$ 2.5
Realized losses on investments	0.0	(0.7)	(0.1)
Net realized gains on investments	$ 0.0	$ 0.5	$ 2.4

SHARE-BASED COMPENSATION - Schedule of Option Activity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Number of Shares
Outstanding, beginning balance (in shares)	0.2	0.4
Granted (in shares)	0.0	0.0
Exercised (in shares)	0.0	(0.1)
Forfeited, expired or canceled (in shares)	(0.1)	(0.1)
Outstanding, ending balance (in shares)	0.1	0.2	0.4
Weighted-Average Exercise Price
Outstanding, beginning balance (in dollars per share)	$ 38,150,000	$ 42,480,000
Granted (in dollars per share)	8.94	21,420,000
Exercised (in dollars per share)	0	6,600,000
Forfeited, expired or canceled (in dollars per share)	44.88	83,890,000
Outstanding, ending balance (in dollars per share)	$ 33.68	$ 38,150,000	$ 42,480,000
Outstanding, weighted-average remaining contractual term (in years)	4 years 3 months 14 days	5 years 7 months 17 days	6 years 1 month 13 days
Outstanding, aggregate intrinsic value	$ 0.5	$ 0.2	$ 9.5
Exercised, aggregate intrinsic value	$ 0.0	$ 1.9

INCOME TAXES - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Current:
Federal	$ 0.0	$ 0.0	$ 0.0
State	0.0	0.0	0.0
Total current	0.0	0.0	0.0
Deferred:
Federal	0.0	0.0	0.0
State	0.0	0.0	0.0
Total deferred	0.0	0.0	0.0
Total income tax expense (benefit)	$ 0.0	$ 0.0	$ 0.0

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

GEOGRAPHICAL BREAKDOWN OF GROSS PREMIUM WRITTEN

12 Months Ended

Dec. 31, 2023

Insurance [Abstract]

GEOGRAPHICAL BREAKDOWN OF GROSS PREMIUMS WRITTEN

REINSURANCE

The following table reflects amounts affecting the consolidated balance sheets and statements of operations and comprehensive loss for reinsurance as of and for the years ended December 31:


	2023		2022		2021
	(dollars in millions)
Loss and LAE reserves:
Direct	$	253.4	$	269.3	$	313.2
Assumed	30.8		18.1		7.0
Ceded	(43.8)		(76.4)		(79.5)
Net loss and LAE reserves	$	240.4	$	211.0	$	240.7
Unearned premiums:
Direct	$	235.4	$	125.8	$	170.6
Assumed	48.3		10.7		9.5
Ceded	(48.2)		(74.2)		(100.8)
Net unearned premiums	$	235.5	$	62.3	$	79.3
Premiums written:
Direct	$	674.6	$	556.8	$	725.9
Assumed	108.5		43.2		16.7
Ceded	(209.9)		(331.2)		(397.3)
Net premiums written	$	573.2	$	268.8	$	345.3
Premiums earned:
Direct	$	564.9	$	601.6	$	712.3
Assumed	70.9		42.0		7.3
Ceded	(235.9)		(357.7)		(409.3)
Net premiums earned	$	399.9	$	285.9	$	310.3
Losses and LAE incurred:
Direct	$	424.1	$	549.8	$	683.9
Assumed	51.7		44.9		10.9
Ceded	(144.5)		(243.7)		(302.5)
Net losses and LAE incurred	$	331.3	$	351.0	$	392.3

During 2023, we commuted certain agreements with our reinsurers which resulted in $0.7 million of loss and loss adjustment expenses and a $4.6 million expense of other insurance expense (benefit), respectively, on the consolidated statements of operations and comprehensive loss. A portion of the loss and loss adjustment expenses is related to an allowance for credit losses of $1.7 million, that was established due to a commutation with one of our reinsurers as of December 31, 2023.

Additionally, in connection with the commutation of certain agreements with reinsurers during 2023, we received cash and cash equivalents and released collateral balances held of $27.1 million, reinsurance recoverable

and receivable decreased by $35.1 million, prepaid reinsurance premiums were reduced by $34.6 million and reinsurance premiums payable decreased by $37.3 million.

If our reinsurance was cancelled at December 31, 2023 and 2022, the maximum amount of return ceded commissions due with the return of unearned premiums would have been $12.3 million and $19.0 million, respectively. Our reinsurance recoverable on unpaid losses gross of the provision for loss corridor, loss ratio caps and allowance for credit losses was $65.6 million and $143.3 million as of December 31, 2023 and 2022, respectively. As of December 31, 2023 and 2022, a provision for loss corridor of $19.4 million and $66.2 million, respectively, was recorded as a contra-asset in reinsurance recoverable on the consolidated balance sheets.

GEOGRAPHICAL BREAKDOWN OF GROSS PREMIUMS WRITTEN

Gross premiums written by state is as follows for the years ended December 31, 2023, 2022 and 2021:


	For the Years Ended December 31,
	2023				2022				2021
	Amount		% of Total		Amount		% of Total		Amount		% of Total
	(dollars in millions)
State:
Texas	$	134.3	17.1	%	$	109.3	18.2	%	$	152.3	20.5	%
Georgia	94.3		12.0		62.3		10.4		79.2		10.7
Colorado	53.6		6.8		40.6		6.8		33.5		4.5
Pennsylvania	45.2		5.8		34.9		5.8		39.8		5.4
Arizona	35.4		4.5		17.1		2.9		23.5		3.2
South Carolina	34.4		4.4		20.1		3.4		26.3		3.5
Utah	30.8		3.9		30.9		5.2		33.8		4.6
Ohio	26.7		3.4		15.1		2.5		18.0		2.4
Oklahoma	23.6		3.0		19.8		3.3		22.5		3.0
Missouri	22.9		2.9		17.2		2.9		24.7		3.3
All others states	281.9		36.2		232.7		38.6		289.0		38.9
Total	$	783.1	100.0	%	$	600.0	100.0	%	$	742.6	100.0	%

LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES - Schedule of Reconciliation (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Insurance [Abstract]
Loss and ALAE reserves—net of reinsurance	$ 222.5	$ 195.0
ULAE reserves—net of reinsurance	17.9	16.0
Reinsurance recoverables on unpaid losses	43.8	76.4	$ 79.5	$ 79.6
Total loss and LAE reserves—gross of reinsurance	$ 284.2	$ 287.4	$ 320.2	$ 237.2

LEASES - Schedule of Future Lease Payments (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Leases [Abstract]
2024	$ 3.0
2025	2.2
2026	2.3
2027	2.4
2028	0.2
2029 and thereafter	0.0
Total future lease payments	10.1
Less: imputed interest	(1.9)
Total lease liabilities	$ 8.2	$ 10.5

INVESTMENTS - Special Deposits (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Investments, Debt and Equity Securities [Abstract]
Amortized costs of special deposits	$ 9.5	$ 11.7
Fair of special deposits	$ 9.4	$ 11.3

AUDIT INFORMATION	12 Months Ended
AUDIT INFORMATION	Dec. 31, 2023
Audit Information [Abstract]
Auditor Firm ID	34
Auditor Name	DELOITTE & TOUCHE LLP
Auditor Location	Columbus, Ohio

REINSURANCE - Schedule of Gross Premiums Written (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Loss and LAE reserves:
Direct	$ 253.4	$ 269.3	$ 313.2
Assumed	30.8	18.1	7.0
Ceded	(43.8)	(76.4)	(79.5)	$ (79.6)
Net loss and LAE reserves	240.4	211.0	240.7	$ 157.6
Unearned premiums:
Direct	235.4	125.8	170.6
Assumed	48.3	10.7	9.5
Ceded	(48.2)	(74.2)	(100.8)
Net unearned premiums	235.5	62.3	79.3
Premiums written:
Direct	674.6	556.8	725.9
Assumed	108.5	43.2	16.7
Ceded	(209.9)	(331.2)	(397.3)
Net premiums written	573.2	268.8	345.3
Premiums earned:
Direct	564.9	601.6	712.3
Assumed	70.9	42.0	7.3
Ceded	(235.9)	(357.7)	(409.3)
Net premiums earned	399.9	285.9	310.3
Losses and LAE incurred:
Direct	424.1	549.8	683.9
Assumed	51.7	44.9	10.9
Ceded	(144.5)	(243.7)	(302.5)
Net losses and LAE incurred	$ 331.3	$ 351.0	$ 392.3

GEOGRAPHICAL BREAKDOWN OF GROSS PREMIUM WRITTEN (Tables)

12 Months Ended

Dec. 31, 2023

Insurance [Abstract]

Schedule of Gross Premiums Written

The following table reflects amounts affecting the consolidated balance sheets and statements of operations and comprehensive loss for reinsurance as of and for the years ended December 31:


	2023		2022		2021
	(dollars in millions)
Loss and LAE reserves:
Direct	$	253.4	$	269.3	$	313.2
Assumed	30.8		18.1		7.0
Ceded	(43.8)		(76.4)		(79.5)
Net loss and LAE reserves	$	240.4	$	211.0	$	240.7
Unearned premiums:
Direct	$	235.4	$	125.8	$	170.6
Assumed	48.3		10.7		9.5
Ceded	(48.2)		(74.2)		(100.8)
Net unearned premiums	$	235.5	$	62.3	$	79.3
Premiums written:
Direct	$	674.6	$	556.8	$	725.9
Assumed	108.5		43.2		16.7
Ceded	(209.9)		(331.2)		(397.3)
Net premiums written	$	573.2	$	268.8	$	345.3
Premiums earned:
Direct	$	564.9	$	601.6	$	712.3
Assumed	70.9		42.0		7.3
Ceded	(235.9)		(357.7)		(409.3)
Net premiums earned	$	399.9	$	285.9	$	310.3
Losses and LAE incurred:
Direct	$	424.1	$	549.8	$	683.9
Assumed	51.7		44.9		10.9
Ceded	(144.5)		(243.7)		(302.5)
Net losses and LAE incurred	$	331.3	$	351.0	$	392.3

Gross premiums written by state is as follows for the years ended December 31, 2023, 2022 and 2021:


	For the Years Ended December 31,
	2023				2022				2021
	Amount		% of Total		Amount		% of Total		Amount		% of Total
	(dollars in millions)
State:
Texas	$	134.3	17.1	%	$	109.3	18.2	%	$	152.3	20.5	%
Georgia	94.3		12.0		62.3		10.4		79.2		10.7
Colorado	53.6		6.8		40.6		6.8		33.5		4.5
Pennsylvania	45.2		5.8		34.9		5.8		39.8		5.4
Arizona	35.4		4.5		17.1		2.9		23.5		3.2
South Carolina	34.4		4.4		20.1		3.4		26.3		3.5
Utah	30.8		3.9		30.9		5.2		33.8		4.6
Ohio	26.7		3.4		15.1		2.5		18.0		2.4
Oklahoma	23.6		3.0		19.8		3.3		22.5		3.0
Missouri	22.9		2.9		17.2		2.9		24.7		3.3
All others states	281.9		36.2		232.7		38.6		289.0		38.9
Total	$	783.1	100.0	%	$	600.0	100.0	%	$	742.6	100.0	%

SHARE-BASED COMPENSATION - Performance Stock Units (Details) - Performance-based restricted stock unit expense shares in Millions	12 Months Ended
	Dec. 31, 2023 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares) \| shares	0.4
Tranche 1
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock price goals (in dollars per share)	$ 16,760,000
Granted (in shares) \| shares	0.0
Granted (in dollars per shares)	$ 7,690,000
Tranche 2
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock price goals (in dollars per share)	$ 25,140,000
Granted (in shares) \| shares	0.1
Granted (in dollars per shares)	$ 6,700,000
Tranche 3
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock price goals (in dollars per share)	$ 33,520,000
Granted (in shares) \| shares	0.1
Granted (in dollars per shares)	$ 5,870,000
Tranche 4
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock price goals (in dollars per share)	$ 41,900,000
Granted (in shares) \| shares	0.2
Granted (in dollars per shares)	$ 5,100,000

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 35
-Paragraph 1D
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480483/718-10-35-1D

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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-URI https://asc.fasb.org//1943274/2147480483/718-10-35-3

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-Topic 718
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
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Reference 19: http://www.xbrl.org/2003/role/disclosureRef
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Reference 24: http://www.xbrl.org/2003/role/disclosureRef
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Reference 25: http://www.xbrl.org/2003/role/disclosureRef
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Reference 26: http://www.xbrl.org/2003/role/disclosureRef
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Reference 27: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

FAIR VALUE OF FINANCIAL INSTRUMENTS - Schedule of Carrying Amounts and Fair Values of Financial Instruments (Details) - Level 2 - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Carrying amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt	$ 299.0	$ 295.4
Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt	$ 305.2	$ 309.7

COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of Purchase Obligations

The following table summarizes, by remaining maturity, future commitments related to other arrangements as of December 31, 2023:


	Purchase Obligations
	(dollars in millions)
2024	$	13.3
2025	13.9
2026	11.0
2027	—
2028 and thereafter	—
Total	$	38.2

INVESTMENTS - Other investments (Details) - USD ($)	12 Months Ended
INVESTMENTS - Other investments (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Investments, Debt and Equity Securities [Abstract]
Other investments	$ 4,400,000	$ 4,400,000
Realized gain on other investments	$ 0	$ 1,200,000	$ 0

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Cash flows from operating activities:
Net loss	$ (147.4)	$ (297.7)	$ (521.1)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation	17.3	30.5	19.3
Warrant compensation expense	17.4	14.5	8.8
Depreciation and amortization	12.6	13.8	16.6
Bad debt expense	14.1	17.4	20.9
Loss on early extinguishment of debt	0.0	0.0	15.9
Paid-in-kind interest expense	0.0	0.0	10.6
Paid-in-kind interest paid	0.0	0.0	(20.5)
Net realized gains on investments	0.0	(0.5)	(2.4)
Gain on lease modification	(0.3)	(0.9)	0.0
Change in fair value of equity securities	0.0	0.0	(3.8)
Changes in operating assets and liabilities:
Premiums receivable	(147.7)	18.8	(39.7)
Reinsurance recoverable and receivable	21.9	6.2	(30.4)
Prepaid reinsurance premiums	26.0	26.6	12.0
Other assets	4.8	(7.5)	0.8
Losses and loss adjustment expenses reserves	(3.2)	(32.8)	83.0
Unearned premiums	147.2	(43.6)	23.0
Reinsurance premiums payable	(65.4)	18.2	12.5
Accounts payable and accrued expenses	27.7	17.9	(19.2)
Other liabilities	41.4	8.5	10.3
Net cash used in operating activities	(33.6)	(210.6)	(403.4)
Cash flows from investing activities:
Purchases of investments	(76.0)	(47.7)	(17.0)
Proceeds from maturities, call and pay downs of investments	37.5	34.1	34.7
Sales of investments	2.2	7.1	70.4
Purchases of indefinite-lived intangible assets and transaction costs	0.0	(1.3)	0.0
Capitalization of internally developed software	(9.2)	(8.8)	(6.6)
Purchases of fixed assets	(0.2)	0.0	(4.6)
Net cash (used in) provided by investing activities	(45.7)	(16.6)	76.9
Cash flows from financing activities:
Proceeds from exercise of stock options and restricted stock units, net of tax (withholding)/ proceeds	(1.1)
Proceeds from exercise of stock options and restricted stock units, net of tax (withholding)/ proceeds		0.3	3.2
Proceeds from issuance of preferred stock and related warrants	0.0	0.0	126.5
Payment of preferred stock and related warrants issuance costs	(3.0)	(3.0)	(10.5)
Proceeds from issuance of debt and related warrants, net of issuance costs	0.0	286.0	0.0
Repayments of long-term debt	0.0	0.0	(199.5)
Net cash (used in) provided by financing activities	(4.1)	283.3	(80.3)
Net (decrease) increase in cash, cash equivalents and restricted cash	(83.4)	56.1	(406.8)
Cash, cash equivalents and restricted cash at beginning of year	763.1	707.0	1,113.8
Cash, cash equivalents and restricted cash at end of year	$ 679.7	$ 763.1	$ 707.0

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Fixed Assets (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Total fixed assets, at cost	$ 16.1	$ 18.3
Accumulated depreciation	(13.3)	(12.8)
Fixed assets, net	2.8	5.5
Computers
Property, Plant and Equipment [Line Items]
Total fixed assets, at cost	5.9	6.8
Furniture
Property, Plant and Equipment [Line Items]
Total fixed assets, at cost	2.6	2.6
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total fixed assets, at cost	$ 7.6	$ 8.9

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Schedule of Supplemental Disclosures

The supplemental disclosures for cash and non-cash flows for the years ended December 31, 2023, 2022 and 2021 are as follows:


	For the Years Ended December 31,
	2023		2022		2021
	(in millions)
Supplemental disclosures:
Interest paid	$	42.5	$	24.5	$	23.9
Federal income taxes paid	—		—		—
Leasehold improvements - non-cash	—		0.9		1.5



Lease liabilities arising from obtaining right-of-use asset	—		—		9.9
Investment Agreement issuance costs - non-cash	—		—		9.1

Schedule of Cash and Cash Equivalents

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amount in the consolidated statements of cash flows:


	As of December 31,
	2023		2022
	(in millions)
Cash and cash equivalents	$	678.7	$	762.1
Restricted cash	1.0		1.0
Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows	$	679.7	$	763.1

Schedule of Capitalized Computer Software

The capitalized cost and accumulated amortization of internally developed software in other assets in our consolidated balance sheets at December 31, 2023 and 2022 are as follows:


	As of December 31,
	2023		2022
	(dollars in millions)
Internally developed software	$	38.5	$	29.3
Accumulated amortization	(19.3)		(13.0)
Internally developed software, net	$	19.2	$	16.3

Schedule of Fixed Assets

The capitalized cost and accumulated depreciation of fixed assets in other assets in our consolidated balance sheets at December 31, 2023 and 2022 are as follows:


	As of December 31,
	2023		2022
	(dollars in millions)
Computers	$	5.9	$	6.8
Furniture	2.6		2.6
Leasehold improvements	7.6		8.9
Total fixed assets, at cost	16.1		18.3
Accumulated depreciation	(13.3)		(12.8)
Fixed assets, net	$	2.8	$	5.5

NATURE OF BUSINESS	12 Months Ended
NATURE OF BUSINESS	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
NATURE OF BUSINESS	NATURE OF BUSINESS Root, Inc. is a holding company which, directly or indirectly, maintains 100% ownership of each of its subsidiaries, including, among others, Root Insurance Company and Root Property & Casualty Insurance Company, or Root Property & Casualty, both Ohio-domiciled insurance companies, and Root Reinsurance Company, Ltd., a Cayman Islands-domiciled reinsurance company, together with Root, Inc., “we,” “us” or “our.” We were formed in 2015 and began writing personal auto insurance in July 2016. We are a technology company operating primarily a direct-to-consumer model with the majority of our personal insurance customers acquired through mobile apps. We offer auto and renters insurance products underwritten by Root Insurance Company and Root Property & Casualty.

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Millions, $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Amortized cost, fixed maturities	$ 168.4	$ 134.2
Amortized cost, short term investments	0.9	0.4
Allowance for premiums receivable	4.0	2.8
Allowance for credit loss	$ 1.8	$ 0.2
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, issued (in shares)	14.1	14.1
Preferred stock, outstanding (in shares)	14.1	14.1
Preferred stock, liquidation preference	$ 126.5
Class A Shares
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares issued (in shares)	9.5	9.2
Common stock, shares outstanding (in shares)	9.5	9.2
Class B Shares
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares issued (in shares)	5.0	5.0
Common stock, shares outstanding (in shares)	5.0	5.0

SHARE-BASED COMPENSATION - Schedule of Share-based Compensation Expense (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total share-based compensation expense	$ 17.3	$ 30.5	$ 19.3
Restricted stock unit expense
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total share-based compensation expense	15.8	28.8	14.9
Performance-based restricted stock unit expense
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total share-based compensation expense	0.4	0.0	0.0
Stock option expense
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total share-based compensation expense	1.1	1.7	4.4
Loss and loss adjustment expenses
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total share-based compensation expense	0.7	0.7	1.5
Sales and marketing
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total share-based compensation expense	0.3	0.8	1.0
Other insurance expense (benefit)
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total share-based compensation expense	0.6	0.8	1.6
Technology and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total share-based compensation expense	3.4	3.3	4.5
General and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total share-based compensation expense	$ 12.3	$ 24.9	$ 10.7

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

Schedule of Fair Value of Assets and Liabilities

The following tables provide information about our financial assets measured and reported at fair value as of December 31, 2023 and 2022:


	2023
	Level 1		Level 2		Level 3		Total Fair Value
	(dollars in millions)
Assets
Fixed maturities:
U.S. Treasury securities and agencies	$	13.3	$	1.3	$	—	$	14.6
Municipal securities	—		24.1		—		24.1
Corporate debt securities	—		65.2		—		65.2
Residential mortgage-backed securities	—		11.9		—		11.9
Commercial mortgage-backed securities	—		29.8		—		29.8
Other debt obligations	—		20.3		—		20.3
Total fixed maturities	13.3		152.6		—		165.9
Short-term investments	0.9		—		—		0.9
Cash equivalents	439.6		—		—		439.6
Total assets at fair value	$	453.8	$	152.6	$	—	$	606.4

	2022
	Level 1		Level 2		Level 3		Total Fair Value
	(dollars in millions)
Assets
Fixed maturities:
U.S. Treasury securities and agencies	$	9.2	$	1.8	$	—	$	11.0
Municipal securities	—		20.2		—		20.2
Corporate debt securities	—		57.8		—		57.8
Residential mortgage-backed securities	—		5.2		—		5.2
Commercial mortgage-backed securities	—		23.2		—		23.2
Other debt obligations	—		11.0		—		11.0
Total fixed maturities	9.2		119.2		—		128.4
Short-term investments	—		0.4		—		0.4
Cash equivalents	487.3		—		—		487.3
Total assets at fair value	$	496.5	$	119.6	$	—	$	616.1

Schedule of Carrying Amounts and Fair Values of Financial Instruments

As of December 31, 2023 and 2022, the carrying amounts and fair values of these financial instruments were as follows:


	Carrying Amount as of December 31, 2023		Estimated Fair Value as of December 31, 2023		Carrying Amount as of December 31, 2022		Estimated Fair Value as of December 31, 2022
	(dollars in millions)
Long-term debt	$	299.0	$	305.2	$	295.4	$	309.7

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Consolidation—The consolidated financial statements include the accounts of Root, Inc. and its subsidiaries, all of which are wholly owned. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. All intercompany accounts and transactions have been eliminated.

Use of Estimates—The preparation of consolidated financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates reflected in our consolidated financial statements include, but are not limited to, reserves for loss and loss adjustment expense, or LAE, valuation allowance for income taxes and allowance for expected credit losses on premium receivables and reinsurance recoverables.

Reverse Stock Split— In August 2022, an authorized subcommittee of our board of directors approved a reverse stock split of our Class A and Class B common stock at a ratio of 1-for-18. On August 12, 2022, we filed a Certificate of Amendment to our Amended and Restated Certificate of Incorporation to effect a 1-for-18 reverse stock split of our Class A and Class B common stock. As a result of the reverse stock split, every 18 shares of our issued or outstanding pre-reverse split common stock of each class were combined into one share of common stock of such class. No fractional shares were issued upon the reverse stock split. On August 15, 2022, our Class A common stock began trading on a split-adjusted basis on the Nasdaq Global Select Market.

In connection with the reverse stock split, there was no change to the shares authorized or in the par value per share of $0.0001. In addition, there was no change to the number of shares issued or outstanding for our Series A Preferred Stock. The conversion price for our Series A Preferred Stock was adjusted to $162.00 and the exercise price and number of warrant shares for each of our outstanding warrants were also proportionately adjusted. Accordingly, all historical per share data, number of shares outstanding and other common stock equivalents for the periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the reverse stock split.

Legal Contingencies—From time to time, we are party to litigation and legal proceedings relating to our business operations. We consider legal actions relating to claims made in the ordinary course of seeking indemnification for a loss covered by the insurance policy in establishing loss and LAE reserves. In the ordinary course of business we also face certain lawsuits that seek damages beyond policy limits, or extra-contractual claims.

We continually evaluate potential liabilities and reserves for litigation using the guidance issued in Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 450, Contingencies. Under this guidance, we may only record reserves for a loss if as of the date the financial statements are issued or available to be issued, the likelihood of occurrence is deemed probable and we can reasonably estimate the amount

of the loss. When disclosing litigation or claims where a material loss is judged to be reasonably possible, we will disclose an estimated range of loss or state that an estimate cannot be made. We consider each legal action using this guidance and record reserves for losses as warranted by establishing a reserve in loss and loss adjustment expense reserves for extra-contractual claims and other liabilities for class action and other non-claims related lawsuits in our consolidated balance sheets. Any non-reinsurance related recoveries are recognized as other assets in our consolidated balance sheets. We record amounts within loss and loss adjustment expenses for extra-contractual claims and general and administrative for class action and other non-claims related lawsuits in our consolidated statements of operations and comprehensive loss. Further details are discussed in Note 13, “Commitments and Contingencies.”

Debt and Equity Issuance Costs—Debt and equity issuance costs, which primarily consist of advisor, legal, accounting, and other third-party fees directly related to issuing debt and equity instruments, are capitalized as other assets in our consolidated balance sheets as incurred. We incurred such costs in connection with the investment agreement with Carvana Group, LLC, or Investment Agreement, that we entered into on August 21, 2021 and our $300.0 million five-year term loan, or Term Loan, that we entered into on January 26, 2022. Upon close of the related transaction, these deferred issuance costs are generally offset against the related proceeds. Debt issuance costs are subsequently amortized over the term of the financing agreement as interest expense on the consolidated statements of operations and comprehensive loss.

Indefinite-Lived Intangible Assets—We had insurance licenses of $8.9 million, including transaction costs, as of December 31, 2023 and 2022 in other assets on the consolidated balance sheets. We incur a minimal fee to renew each license. These intangible assets are not amortized, but instead are tested for impairment annually or when indicators of impairment exist. The impairment test for indefinite-lived intangibles involves first assessing qualitative factors to determine if it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount. If so, then a quantitative test is performed to compare the estimated fair value of the indefinite-lived intangible asset to the respective asset's carrying amount. The evaluation requires the use of estimates and significant judgments and considers the weight of evidence and significance of all identified events and circumstances and most relevant drivers of fair value, both positive and negative, in determining whether it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount. We had $1.3 million, including transaction costs, as of December 31, 2023 and 2022 related to the purchase of the Root.com domain in March 2022, in other assets on the consolidated balance sheets. No impairment was recognized for 2023, 2022 or 2021 related to indefinite-lived intangible assets.

Segment Information—Our chief operating decision maker is the Chief Executive Officer. The chief operating decision maker manages operations, allocates resources, and evaluates financial performance on a company-wide basis. We operate in one reporting segment providing insurance products to customers.

Statement of Cash Flows—The supplemental disclosures for cash and non-cash flows for the years ended December 31, 2023, 2022 and 2021 are as follows:


	For the Years Ended December 31,
	2023		2022		2021
	(in millions)
Supplemental disclosures:
Interest paid	$	42.5	$	24.5	$	23.9
Federal income taxes paid	—		—		—
Leasehold improvements - non-cash	—		0.9		1.5



Lease liabilities arising from obtaining right-of-use asset	—		—		9.9
Investment Agreement issuance costs - non-cash	—		—		9.1

Cash, Cash Equivalents and Restricted Cash—Cash consists of cash on deposit. Cash equivalents are short-term, highly liquid investments that typically mature within three months from the date of origination or purchase and are principally stated at amortized cost, which approximates their fair value. Restricted cash consists of amounts held by a financial institution to satisfy letter of credit requirements for certain property leases.

If checks are issued in excess of cash balances in individual bank accounts, a book overdraft shall be reclassified to accounts payable on the consolidated balance sheets. When a check is issued whereby a disbursement account is used to write the check, but the account is not funded until the check is presented for payment this “negative cash” balance is included in cash and cash equivalents on the consolidated balance sheets, if the funding account has sufficient funds.


	As of December 31,
	2023		2022
	(in millions)
Cash and cash equivalents	$	678.7	$	762.1
Restricted cash	1.0		1.0
Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows	$	679.7	$	763.1

Investments—Investments in debt securities are classified as short-term and available-for-sale fixed maturity securities and are carried at fair value with any unrealized gains and losses, net of taxes, recorded as a component of accumulated other comprehensive income.

Management regularly reviews our securities for signs of impairment, an assessment requiring significant management judgment. The criteria that management considers are the financial condition of the issuer, including receipt of scheduled principal and interest cash flows, fair value of a security that has fallen below the amortized value, maturity dates, current economic conditions and intent to sell, including if it is more likely than not that we will be required to sell the security before recovery. We then assess whether the decline in value is due to non-credit related or credit related factors. Non-credit related declines in fair value are recorded as unrealized losses in accumulated other comprehensive income. If we determine that the decline is credit related, we establish an allowance for credit losses equal to the difference between the discounted cash flow model and the amortized value, which is recorded in net realized gains on investments in our consolidated statements of operations and comprehensive loss. This allowance may be subsequently adjusted for recoveries or further credit losses. No such credit losses were recognized in 2023, 2022 and 2021.

Other investments primarily consist of private equity investments without a readily determinable fair value. We elected to account for these investments at cost minus any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or a similar investment of the same issuer. Such changes are accounted for within net investment income in our consolidated statements of operations and comprehensive loss.

We also invest in Low Income Housing Tax Credits, or LIHTC, projects by way of investing in a limited liability entity to offset Georgia premium taxes. The purpose of these investments is to encourage private capital investments into regions within Georgia that are in need of economic development, while providing tax credits and operating loss tax benefits to investors. We account for this investment using the cost method because our interest in the limited liability entity is minor and we have virtually no influence over the entity’s operating and financial policies. When we utilize the tax credits, the associated investment becomes impaired. Impairment of the investment is recognized within net investment income in our consolidated statements of operations and comprehensive loss.

Fair Value Measurements—Fair value is defined as the price that would be received upon selling an asset or the price paid to transfer a liability on the measurement date in the principal or most advantageous market for the asset or liability in an orderly transaction between willing market participants. A three-tier hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair values are:

Level 1 - Financial assets and liabilities for which inputs are observable and are obtained from reliable quoted prices in active markets for identical assets and liabilities.

Level 2 - Financial assets and liabilities for which values are based on quoted prices in markets that are not active or for which values are based on similar assets and liabilities that are actively traded. This also includes pricing models for which the inputs are corroborated by market data.

Level 3 - Financial assets and liabilities for which values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.

Leases—We record leases in accordance with ASC Topic 842, Leases. We recognized a right-of-use asset and liability on the consolidated balance sheets for all leases, except for leases covering a period of fewer than 12 months. Operating lease expense for operating lease right-of-use assets is recognized on a straight-line basis over the lease term, which may include options to extend or terminate the lease when it is reasonably certain to do so and there is a significant economic incentive to exercise that option. For additional information refer to Note 8, “Leases.”

Premiums, Premiums Receivable and Premium Write-offs—Premiums written are deferred and earned pro rata over the policy period. Unearned premium is established to cover the unexpired portion of premiums written. A premium deficiency, as measured on a gross basis, is recorded when the sum of expected losses, LAE, unamortized acquisition costs and maintenance costs exceed the recorded unearned premium reserve and anticipated investment income. A premium deficiency reserve is recognized as a reduction of deferred policy acquisition costs and, if necessary, by accruing an additional liability for the deficiency, with a corresponding charge to operations. We did not record a premium deficiency reserve in 2023, 2022 or 2021.

We have a fronting arrangement with an unaffiliated Texas county mutual insurance company, or the fronting carrier. We route all of our new auto policies in Texas through the fronting carrier whereby we assume 100% of the related premium and losses on those policies. The fronting arrangement allows us to have greater rating and underwriting flexibility. Premiums assumed are deferred and earned pro rata over the policy period. Unearned premium is established to cover the unexpired portion of premiums assumed. Unaffiliated premiums payable are amounts owed to the fronting carrier for premiums assumed and are recorded in other liabilities on the consolidated balance sheets. Unaffiliated premiums payable was $60.5 million and $14.2 million as of December 31, 2023 and 2022, respectively. Unaffiliated reinsurance premiums receivable are the amounts owed to us from the fronting carrier for reinsurance premiums and are recorded in reinsurance recoverable and receivable on the consolidated balance sheets. Unaffiliated reinsurance premiums receivable was $59.2 million and $14.1 million as of December 31, 2023 and 2022, respectively.

Premiums receivable represents premiums written but not yet collected. Generally, premiums are collected prior to providing risk coverage, minimizing our exposure to credit risk. Due to a variety of factors, certain premiums billed may not be collected, for which we establish an allowance for expected credit losses based primarily on an analysis of historical collection experience, adjusted for current economic conditions. Allowance for credit losses was $4.0 million and $2.8 million as of December 31, 2023 and 2022, respectively, on the consolidated balance sheets. A policy is considered past due on the first day after its due date and policies greater than 90 days past due are written-off. We recognized bad debt expense of $12.5 million, $17.4 million and $20.9 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Fee Income—Fee income consists primarily of the flat fee we charge for installment payments which relates to the additional administrative costs associated with processing more frequent billings. These fees are recognized in the period in which we process the installment. We also charge policy fees which are typically nonrefundable fees that are intended to reimburse a portion of the costs incurred to underwrite the policy. These fees are recognized

ratably over the policy coverage period. Fee income also includes late payment fees that are collected from our policyholders. These fees are recognized in the period in which we process the late payment.

Other Income—Other income is comprised of revenue earned from distributing website and app policy inquiry leads in geographies where we do not have a presence, recognized when we generate the lead; and commissions earned for homeowners policies placed with third-party insurance companies where we have no exposure to the insured risk, recognized on the effective date of the associated policy.

Sales and Marketing—Sales and marketing includes expenses related to direct performance marketing, channel media, advertising, sponsorship, referral fees and partnership channel. These expenses also include related salaries, health benefits, bonuses, employee retirement plan-related expenses and employee share-based compensation expense, or Personnel Costs, and overhead allocated based on headcount, or Overhead, related to our brand strategy, creative and business development activities and certain warrant compensation expense related to our embedded channel. We incur sales and marketing expenses for all product offerings. Sales and marketing costs are expensed as incurred. Certain warrant compensation expense is recognized on a pro-rata basis considering progress toward completing the integrated automobile insurance solution for Carvana Group, LLC’s, or Carvana’s, online car buying platform, or Integrated Platform, under the Carvana commercial agreement.

Other Insurance Expense (Benefit)—Other insurance expense (benefit) includes underwriting expenses, commission expenses related to our partnership channel, premium taxes, credit card and policy processing expenses, premium write-offs, insurance license expenses, certain warrant compensation expense related to our embedded channel, and Personnel Costs and Overhead related to actuarial and certain data science activities. We amortize a portion of our deferred policy acquisition costs including certain commissions related to our partnership channel, premium taxes and report costs related to the successful acquisition of a policy. Other insurance expense (benefit) is expensed as incurred, except for costs related to deferred policy acquisition costs that are capitalized and subsequently amortized over the same period in which the related premiums are earned. Certain warrant compensation expense is recognized on a pro-rata basis for policies originated from the Integrated Platform towards milestones as defined under the Carvana commercial agreement.

These expenses are also recognized net of ceding commissions earned from our quota share reinsurance agreements. The ceding commission provides for reimbursement of both direct and other periodic acquisition costs, including certain underwriting and marketing costs, and is presented as a reduction of other insurance expense (benefit).

Technology and development—Technology and development expense consists of software development costs related to our mobile app and homegrown information technology systems; third-party services related to infrastructure support; Personnel Costs and Overhead for engineering, product, technology, and certain data science activities; and amortization of internally developed software. Technology and development is expensed as incurred, except for development and testing costs related to internally developed software that are capitalized and subsequently amortized over the expected useful life.

General and Administrative—General and administrative expenses primarily relate to external professional service expenses; Personnel Costs and Overhead for corporate functions; and depreciation expense for computers, furniture and other fixed assets; write-offs; and restructuring costs which include employee costs, real estate exit costs and other costs. General and administrative expenses are expensed as incurred.

Deferred Policy Acquisition Costs—Acquisition costs consist primarily of premium taxes, certain marketing costs and underwriting expenses, and commission expenses related to our partnership channel, net of ceding commissions, related to the successful acquisition of new or renewal business. They are deferred and amortized over the same period in which the related premiums are earned. Ceding commissions relating to reinsurance agreements are recorded as a reimbursement for both deferrable and non-deferrable acquisition costs. The portion of the ceding commission that is equal to the pro rata share of acquisition costs based on quota share percentage is recorded as an offset to the gross deferred policy acquisition costs. Any portion of the ceding commission that exceeds the acquisition costs of the business ceded is recorded as excess ceding commission, a deferred liability, and amortized over the same period in which the related premiums are earned. Deferred policy acquisition costs, net of

accumulated amortization, was $18.0 million and $6.7 million as of December 31, 2023 and 2022, respectively. We amortized deferred policy acquisition costs of $35.1 million, $22.5 million and $26.4 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Loss and Loss Adjustment Expense and Reserves—Loss and LAE include the costs incurred for claims, payments made and estimated future payments to be made to or on behalf of our policyholders, including expenses needed to adjust or settle claims, net of amounts ceded to reinsurers. Loss and LAE reserves include an amount determined using adjuster determined case-base estimates for reported claims and actuarial determined unpaid claim estimates using past experience and historical emergence patterns for unreported losses and LAE. These reserves are a liability established to cover the estimated ultimate cost to settle insured losses. The estimation of the liability for loss and LAE reserves is complex and includes subjective considerations and management’s judgement. The actuarial methods to determine unpaid loss estimates consider loss trends, contract interpretation, mix of business, regulatory environment, economic conditions, inflation and other risk factors impacting claims settlement. The method used to estimate unpaid LAE liability is based on claims transaction data, including the relative cost of adjusting and settling a range of claim types from express material damage claims to more complex injury cases. There is considerable uncertainty associated with the actuarial estimates, and therefore no assurance can be made that the ultimate unpaid claim liability will not vary materially from such estimates. These loss estimates are continually reviewed by management and adjusted as necessary, with adjustments included in the period determined and recorded in loss and LAE in our consolidated statements of operations and comprehensive loss. As such, loss and LAE reserves represent management’s best estimate of the ultimate liability related to reported and unreported claims.

Our loss and LAE reserves are recorded gross of reinsurance and net of amounts expected to be received from salvage (the amount recovered from a total loss claims expense) and subrogation (the right to recover payments from third parties).

Loss and LAE are recorded net of amounts ceded to reinsurers. We enter into reinsurance contracts to limit our exposure to potential losses as well as to provide additional capacity to write more business. Loss and LAE are a function of the size and term of the insurance policies we write and the loss experience associated with the underlying risks. This includes an allowance for credit losses based on the probability of default and expected loss given default of a reinsurer. Loss and LAE may be paid out over a period of years. Various other expenses incurred during claims processing are allocated to LAE. These amounts include claims Personnel Costs, vendor expenses, software expense, internally developed software amortization, and Overhead.

Reinsurance—In the ordinary course of business, we cede and retrocede a portion of our business written and assumed, respectively, to reinsurers to limit the maximum net loss potential arising from large risks and catastrophes. These arrangements, known as treaties, provide for reinsurance coverage on quota-share and excess-of-loss basis. All reinsurance contracts provide for indemnification against loss or liability relating to insurance risk and have been accounted for as reinsurance. Although the ceding of reinsurance does not discharge us from our primary liability to the policyholder, the insurance company that assumes the coverage assumes the related liability. Over time, our strategy continues to evolve and we may choose to amend, commute, and/or non-renew certain third-party reinsurance agreements, which may result in us retaining more of our business in the future. Amounts recoverable from and payable to reinsurers are estimated in a manner consistent with the claim liability associated with the reinsured business. Reinsurance premiums, commissions and expense reimbursements related to reinsured business are accounted for on a basis consistent with the basis used in accounting for the original policies issued and the terms of the reinsurance contracts. Premiums ceded to other companies have been reported as a reduction of premiums earned and are recognized over the remaining policy period based on the reinsurance protection provided. Amounts applicable to reinsurance ceded for unearned premium reserves are reported as a prepaid reinsurance premiums asset in the accompanying consolidated balance sheets and as reduction of unearned premiums in Note 6, “Reinsurance.” Ceding commissions received in connection with reinsurance ceded have been accounted for as a reduction of other insurance expense (benefit) in the consolidated statements of operations and comprehensive loss.

Some of our reinsurance agreements provide for adjustment of amount of coverage based on loss experience. We recognize the asset or liability arising from these adjustable features in the period the adjustment occurs, which is calculated based on experience to date under the agreement.

In the event that all or any of the reinsuring companies might be unable to meet their obligations under existing reinsurance agreements, we would be liable for such defaulted amounts. We evaluate and monitor the financial condition associated with our reinsurers in order to minimize our exposure to significant losses from reinsurer insolvencies. We obtain our reinsurance from a diverse group of reinsurers and monitor concentration as well as financial strength ratings of the reinsurers to minimize counterparty credit risk. To recognize this risk of credit loss, we have established an allowance for credit losses based on the probability of default and the expected loss given default as influenced by factors such as the reinsurer’s credit rating and average life of our reinsurance recoverables. Allowance for credit losses was $1.8 million and $0.2 million as of December 31, 2023 and 2022, respectively.

Income Taxes—For the 2023 tax year, we will file a consolidated federal income tax return with Caret Holdings, Inc., Root Insurance Company, Root Property & Casualty, Root Lone Star Insurance Agency, Inc. and Root Reinsurance Company, Ltd. The consolidated return also includes Root Insurance Agency, LLC, Root Enterprise, LLC and Root Scout, LLC, which are disregarded entities under Caret Holdings, Inc. for federal income tax purposes.

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Deferred tax assets are recognized as allowed under ASC 740, Income Taxes. We establish a valuation allowance when there is more likely than not insufficient evidence to support the recoverability of the deferred tax asset under ASC 740. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and results of recent operations. If it is determined that the deferred tax assets would be realizable in the future in excess of their net recorded amount, an adjustment would be made to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. A valuation allowance of $356.4 million and $322.3 million was established as of December 31, 2023 and 2022, respectively. Further details are discussed in Note 9, “Income Taxes.”

We recognize the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained under examination by the appropriate taxing authority. Interest and penalties on our reserve for uncertain tax positions are recognized as a component of tax expense. As of December 31, 2023 and 2022, we did not have any unrecognized tax benefits for uncertain tax positions and had no accrued interest or penalties related to uncertain tax positions.

The Inflation Reduction Act, or IRA, of 2022 was enacted on August 16, 2022. The IRA introduces a new corporate alternative minimum tax, or CAMT, which generally imposes a 15% minimum tax on the adjusted financial statement income, or AFSI, of large corporations whose three year average annual AFSI exceeds $1.0 billion, or applicable corporations, applies for tax years beginning after December 31, 2022. For the year ended December 31, 2023, we nor our subsidiaries had a three year average annual AFSI exceeding $1.0 billion. As such, we are not an applicable corporation nor subject to CAMT as of December 31, 2023.

Internally Developed Software—We review our software development activity and capitalize costs during the application development phase under ASC 350-40, Internal-Use Software. These costs are amortized on a straight-line basis over a five-year period. Internally developed software costs are assessed for impairment at least quarterly, which also ensures that the assets are still in service. If there are assets identified as no longer in use, the remaining unamortized costs will be fully amortized. We amortized internally developed software of $6.3 million, $5.0 million and $3.7 million for the years ended December 31, 2023, 2022 and 2021, respectively. The capitalized cost and accumulated amortization of internally developed software in other assets in our consolidated balance sheets at December 31, 2023 and 2022 are as follows:


	As of December 31,
	2023		2022
	(dollars in millions)
Internally developed software	$	38.5	$	29.3
Accumulated amortization	(19.3)		(13.0)
Internally developed software, net	$	19.2	$	16.3

Fixed Assets—Fixed Assets are carried at cost, net of accumulated depreciation. We capitalize purchases of certain fixed assets, including computers, furniture, and leasehold improvements. Depreciation on computers and furniture is recognized on a straight-line basis over a useful life of three years and five years, respectively. Depreciation on leasehold improvements is recognized on a straight-line basis over the shorter of their useful life or the life of the lease. When certain events or changes in operating conditions occur, an impairment assessment may be performed on the recoverability of the carrying amounts. For the years ended December 31, 2023, 2022 and 2021, depreciation expense was $1.5 million, $2.1 million and $4.6 million, respectively. The capitalized cost and accumulated depreciation of fixed assets in other assets in our consolidated balance sheets at December 31, 2023 and 2022 are as follows:


	As of December 31,
	2023		2022
	(dollars in millions)
Computers	$	5.9	$	6.8
Furniture	2.6		2.6
Leasehold improvements	7.6		8.9
Total fixed assets, at cost	16.1		18.3
Accumulated depreciation	(13.3)		(12.8)
Fixed assets, net	$	2.8	$	5.5

Employee Share-Based Compensation—We award share-based compensation, including stock options, restricted stock units, or RSUs, performance-based restricted stock units, or PSUs, and restricted stock, to our officers, directors, employees, and certain advisors through approval from the Compensation Committee of the board of directors.

Share-based compensation expense is recognized based on the grant date fair value of the awards, which is determined using the Black-Scholes Merton, or BSM, option-pricing model. The BSM option pricing model requires inputs based on certain subjective assumptions, including the expected stock price volatility, the expected term of the options, the risk-free interest rate for a period that approximates the expected term of the option, and our expected dividend yield. The fair value of common stock underlying the stock options, restricted stock and RSUs granted before our initial public offering, or IPO, had historically been determined by our board of directors, with input from management, and considering third-party valuations of our common stock. Because there had been no public market for our common stock, our board of directors had determined its fair value at the time of grant of the pre-IPO option by considering a number of objective and subjective factors, including financing investment rounds, operating and financial performance, the lack of liquidity of share capital and general and industry specific economic outlook, among other factors. Our board of directors determined the fair value of common stock based on valuations performed using the Option Pricing Method and the Probability Weighted Expected Return Method subject to relevant facts and circumstances. In connection with our IPO, our common stock became listed on the Nasdaq Global Select Market and we use these market prices for the fair value of our common shares. Stock options are generally exercisable for a period up to ten years from the grant date.

We recognize forfeitures as they occur, which generally results in the reversal of previously recognized expense for nonvested awards. In the event of an involuntary termination that results in the cancellation of an award, the remaining unrecognized compensation cost for the entire award is recognized in the period of cancellation. If the award is cancelled and concurrently replaced upon termination, it follows modification accounting, typically as a

Type III improbable-to-probable modification whereby it is effectively treated as a forfeiture and new grant as of the date of termination.

Stock options generally vest over four years — 25% cliff vests after one year and approximately 2% vests each month over three years thereafter. RSUs generally vest over two or four years. For our awards vesting over two years, 50% cliff vests after one year and the remainder vest in equal quarterly installments over the following year. For our awards vesting over four years, 25% cliff vests after one year and the remainder vest in equal quarterly installments over three years thereafter. Certain other RSUs vest in accordance with one of the following patterns: over four years, 25% cliff vests after one year and approximately 2% vests each month over three years thereafter, or fully vest after one year. We generally recognize share-based compensation expense ratably over the respective vesting period.

PSUs are expected to vest over a derived service period of one to four-years and are dependent upon the fulfillment of both a service condition and the achievement of stock-price goals during the performance period, with the latter being classified as a market condition according to ASC 718, Stock Compensation. The service condition with respect to the four tranches of PSUs will be met in installments on April 1, 2024, and each of the subsequent three anniversaries of that date, or Vesting Date Requirement, subject to the individual’s continued service through such dates. Stock price goals must be met on or after the respective tranche’s Vesting Date Requirement and are based on the average closing price per share of our Class A common stock over a consecutive 45 day trading period. Any tranche of PSUs with respect to which the stock price goal has not been met as of April 1, 2028 (the final day of the performance period) will be forfeited as of such date.

The PSU compensation expense is recognized based on the grant date fair value of the award, which was determined by simulating Root’s stock prices using a Monte Carlo simulation in a risk-neutral framework, assuming a Geometric Brownian Motion. The simulation is repeated 100,000 times, and the average of the discounted values for each tranche is the grant date fair value for that tranche. The median time to vest is the derived service period.

Employing a Monte Carlo simulation requires a range of inputs for each uncertain variable, and establishing linkage between the assumptions, if necessary. Inputs and assumptions used in our analysis included our stock price at grant date, exercise prices, the term of the PSUs, equity volatility, risk-free rate and dividend yield. Equity volatility was derived using a blended volatility assumption of 50% weight on Root’s historical volatility calculated from daily stock returns since IPO to the grant date and a 50% weight based on Root’s term matched simple average peer volatility as of the valuation date because our company-specific volatility is not sufficient by itself at the time of grant.

The expense is recognized via a graded vesting method over the derived service period. In the event that both the service condition and market condition are met earlier, expense would be accelerated. If the service condition is not achieved, previously recognized compensation cost for the associated tranche is reversed. In the event that the market conditions are never achieved before the expiration date, but the service condition is met, the respective compensation costs remain recognized.

Warrant Compensation—In October 2021, we closed the Investment Agreement with Carvana that included the issuance of 14.1 million shares of redeemable convertible preferred stock designated as the Series A Convertible Preferred Stock and the issuance of eight tranches of warrants to purchase shares of the Company’s Class A common stock. As part of the Investment Agreement, we and Carvana also entered into a five-year commercial agreement whereby our auto insurance products will be embedded into the Integrated Platform. The commercial agreement provides for agent commissions payable to Carvana for policy origination and an enterprise total loss replacement vehicle solution.

The Carvana warrants compensation expense is recognized based on the grant date fair value of the award, which was determined using a Monte Carlo simulation in a risk-neutral framework, as contemplated in the Income Approach of valuation. Specifically, future equity is simulated in each period assuming a Geometric Brownian Motion. We considered the features of the warrants and the interdependency of exercise decisions between the Short-Term Warrants and the Long-Term Warrants in using the Monte Carlo simulation in order to determine the optimum exercise decision. The optimum exercise decision was made by choosing the option which would give the

highest aggregate expected value to the holder in each of the 100,000 simulated paths. The payoff of each path is then calculated based on the simulated equity and discounted back to time zero using the applicable risk-free rates. The fair value of the warrants are then calculated as the average value from all simulation paths.

Employing a Monte Carlo simulation with Geometric Brownian Motion requires a range of inputs for each uncertain variable, and establishing linkage between the assumptions, if necessary. Inputs and assumptions used in our analysis included our stock price at grant date, exercise prices, the term of the warrants, equity volatility, risk-free rate and dividend yield. Additional considerations included a discount for lack of marketability resulting from Carvana’s five-year lock-up period.

These warrants vest as the parties develop an integrated automobile insurance solution for the Integrated Platform and insurance sales through the Integrated Platform. The associated compensation expense is dependent on our periodic assessment of the probability of the milestones being achieved. If deemed probable, we recognize compensation expense on a pro-rata basis considering progress toward achieving the milestones. If a performance condition is no longer probable of achievement, any previously recognized compensation expense is reversed and no subsequent compensation expense is recognized until achievement is once again probable, at which point a cumulative catch-up is recognized. In determining the classification as equity, we followed guidance issued within ASC 480, Distinguishing Liabilities from Equity, and ASC 815, Derivatives and Hedging.

For additional information refer to Note 12, “Share-Based Compensation.”

Net Loss Per Share—Net loss per share, or EPS, results are a key indicator of the overall performance relative to each share of our outstanding common stock. Basic EPS for both Class A and Class B common stock is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares vested and outstanding during the period. In addition to common shares outstanding, the computation of basic EPS includes instruments for which the holder is deemed to have the present rights to share in current period earnings (loss) with common stockholders.

Diluted EPS for both Class A and Class B common stock includes all the components of basic EPS, plus the dilutive effect of common stock equivalents, but excludes those common stock equivalents from the calculation of diluted EPS when the effect of inclusion, assessed individually, would be anti-dilutive. Notable dilutive securities relevant to our operations are stock options, nonvested shares subject to repurchase, restricted stock units, performance-based restricted stock units, warrants and redeemable convertible preferred stock.

We have operated at a loss for the years ended December 31, 2023, 2022 and 2021. Therefore, the conversion of common stock equivalents would increase the denominator of the EPS calculation and create a lower loss per share. Therefore, these common stock equivalents are considered antidilutive and diluted EPS is equal to basic EPS. Losses are allocated equally between both classes of common stock because they are entitled to the same liquidation and dividend rights.

Recently Adopted Accounting Pronouncements— There were no accounting standards adopted in 2023 that had a material impact in our consolidated financial statements.

Recently Issued Financial Accounting Standards Not Yet Adopted— In November 2023, the FASB issued Accounting Standards Update, or ASU, No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU looks to provide improvements to the segment disclosure by providing users with more decision-useful information about reportable segments in a public entity. The main provisions require a company to disclose, on an annual and interim basis, significant expenses included within each reported measure of segment profit or loss, an amount for other segment items by reportable segment and a description of its composition. It also requires all annual disclosures about a reportable segments’ profit or loss and assets to be reported on an interim basis. Although we operate in only one reporting segment, we are still required to provide all the disclosures required by this ASU and all existing segment disclosures in Topic 280.

The ASU is to be applied retrospectively to all prior periods presented in the financial statements with an effective date for all public entities for fiscal years beginning after December 15, 2023, and interim periods within

fiscal years beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the impact of this ASU.

In December 2023, the FASB issues ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU looks to enhance the transparency and decision usefulness of income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The main provisions to the rate reconciliation disclosure require public entities on an annual basis to: disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. The main provisions to the income taxes paid disclosure require that all entities disclose on an annual basis: the amount of income taxes paid disaggregated by federal, state and foreign taxes and the amount of income taxes paid disaggregated by individual jurisdictions in which income taxes paid meets a quantitative threshold. This ASU also requires all entities to disclose: income (loss) from continuing operations before income tax expense (benefit) disaggregated between domestic and foreign and income tax expense (benefit) from continuing operations disaggregated by federal, state and foreign.

This ASU is to be applied on a prospective basis with an effective date for all public entities for annual periods beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the impact of this ASU.

REINSURANCE - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
REINSURANCE - Narrative (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Effects of Reinsurance [Line Items]
Expense related to allowance for credit loss	$ 1.7
Cash and cash equivalents	678.7	$ 762.1
Reinsurance recoverable and receivable	21.9	6.2	$ (30.4)
Prepaid reinsurance premiums	26.0	26.6	12.0
Expense related to allowance for credit loss	65.4	(18.2)	$ (12.5)
Maximum amount of ceded commissions returned	12.3	19.0
Reinsurance recoverable unpaid losses	65.6	143.3
Provision for loss corridor	$ 19.4	$ 66.2
Preferred stock, authorized (in shares)	100,000,000.0	100,000,000.0
Commutation of Certain Agreements
Effects of Reinsurance [Line Items]
Cash and cash equivalents	$ 27.1
Reinsurance recoverable and receivable	35.1
Prepaid reinsurance premiums	34.6
Expense related to allowance for credit loss	37.3
Loss and loss adjustment expenses
Effects of Reinsurance [Line Items]
Incurred expense for commutations of certain reinsurance agreements	0.7
Other insurance expense (benefit)
Effects of Reinsurance [Line Items]
Incurred expense for commutations of certain reinsurance agreements	$ 4.6

LEASES

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

LEASES

We primarily have operating leases for offices that support our corporate, claims and customer service functions. We determine if an arrangement is a lease at inception by evaluating whether the arrangement conveys the right to use an identified asset and whether we obtain substantially all of the economic benefits from and have the ability to direct the use of the asset. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Operating lease right-of-use assets and corresponding operating lease liabilities are recognized upon the commencement date based primarily on the present value of lease payments over the lease term. We use the implicit

rate of the lease, if it is readily determinable, in determining the present value of lease payments. Our leases generally do not provide an implicit rate. Therefore, we use a collateralized incremental borrowing rate that incorporates information available at commencement date, including our company-specific interest rates from recent debt issuances, which we adjusted to obtain our company-specific interest rate risk. We also leverage commercial mortgage-backed securities, or CMBS, rates for transactions with similar values, origination dates, geographies and property types as the respective lease, which are adjusted using linear interpolation if the lease term falls between the published CMBS terms.

The following table summarizes supplemental balance sheets information related to leases at December 31, 2023 and 2022:


	2023		2022
	(dollars in millions)
Operating leases:
Operating lease liabilities	$	8.2	$	10.5
Operating lease right-of-use assets	$	3.5	$	4.3

Operating lease liabilities are included in other liabilities and operating lease right-of-use assets are included in other assets in our consolidated balance sheets.

The components of lease costs for the years ended December 31, 2023, 2022 and 2021 are as follows:


	For the Years Ended December 31,
	2023		2022		2021
	(dollars in millions)
Lease cost components:
Operating lease costs(1)	$	1.8	$	2.1	$	5.0

______________

(1) Variable lease expense and short-term lease expense recognized during the years ended December 31, 2023, 2022, and 2021 were immaterial.

Supplemental cash flow information for the years ended December 31, 2023, 2022 and 2021 are as follows:


	For the Years Ended December 31,
	2023		2022		2021
	(dollars in millions)
Operating cash flows paid for amounts included in the measurement of lease liabilities	$	3.2	$	3.9	$	3.8

In October 2022, we reduced our square footage at one of our offices. The amendment triggered a remeasurement of the operating lease assets and liabilities at the modification date, resulting in a decrease of $0.9 million as of December 31, 2022. The modification also resulted in a $0.9 million gain for the year ended December 31, 2022. The gain is a contra-expense in general and administrative expenses on the consolidated statements of operations and comprehensive loss.

In August 2022, we ceased using a portion of our corporate headquarters and extended the lease term on the remaining portion to December 31, 2027. The amendment triggered a change in estimate to the respective useful lives, which has been accounted for as a lease modification. The operating lease assets and liabilities were remeasured at the modification date, resulting in an increase of $1.4 million as of December 31, 2022.

We also sublease certain office space, resulting in sublease income. Sublease income and the related assets and cash flows are not material to our consolidated financial statements as of and for the years ended December 31,

2023, 2022 and 2021. Sublease income is recognized as a reduction to operating lease expense in our consolidated statements of operations and comprehensive loss.

The weighted average remaining lease term and weighted average operating lease discount rate, as of December 31, 2023 and 2022 are as follows:


	2023		2022
Weighted average of remaining operating lease term (years)	3.8		4.6
Weighted average operating lease discount rate	11.8	%	11.8	%

Future lease payments as of December 31, 2023 were as follows:


	Operating Leases
	(dollars in millions)
2024	$	3.0
2025	2.2
2026	2.3
2027	2.4
2028	0.2
2029 and thereafter	—
Total future lease payments	10.1
Less: imputed interest	(1.9)
Total lease liabilities	$	8.2

LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES (Tables)

12 Months Ended

Dec. 31, 2023

Insurance [Abstract]

Schedule of Reserve Balance

The following provides a reconciliation of the beginning and ending reserve balances for loss and LAE, net of reinsurance:


	2023		2022		2021
	(dollars in millions)
Gross loss and LAE reserves, January 1	$	287.4	$	320.2	$	237.2
Reinsurance recoverable on unpaid losses	(76.4)		(79.5)		(79.6)
Net loss and LAE reserves, January 1	211.0		240.7		157.6
Net incurred loss and LAE related to:
Current year	338.3		348.1		405.9
Prior years	(7.0)		2.9		(13.6)
Total incurred	331.3		351.0		392.3
Net paid loss and LAE related to:
Current year	165.9		215.6		226.4
Prior years	136.0		165.1		82.8
Total paid	301.9		380.7		309.2
Net loss and LAE reserves, December 31	240.4		211.0		240.7
Plus reinsurance recoverable on unpaid losses	43.8		76.4		79.5
Gross loss and LAE reserves, December 31	$	284.2	$	287.4	$	320.2

The following table sets forth the reconciliation of the claims development tables to the balance sheet losses and ALAE reserves, with separate disclosure of unallocated LAE, or ULAE, and reinsurance recoverable on unpaid losses for the years ended December 31:


	2023		2022
	(dollars in millions)
Loss and ALAE reserves—net of reinsurance	$	222.5	$	195.0
ULAE reserves—net of reinsurance	17.9		16.0
Reinsurance recoverables on unpaid losses	43.8		76.4
Total loss and LAE reserves—gross of reinsurance	$	284.2	$	287.4

Schedule of ALAE by Accident Year

The following table shows incurred and paid losses and allocated loss adjustment expenses, or ALAE, development by accident year for private passenger auto and renters in aggregate, cumulative claim frequency is defined as the number of reported claims at the claim level which includes reported claims that do not result in a liability:


Incurred Losses and ALAE—Net of Reinsurance
Accident Year	2017 (unaudited)		2018 (unaudited)		2019 (unaudited)		2020 (unaudited)		2021 (unaudited)		2022 (unaudited)		2023		IBNR		Reported Claims(1)
			(dollars in millions)
2017	$	1.2	$	1.1	$	1.1	$	1.1	$	1.1	$	1.1	$	1.1	$	—	556
2018			42.3		48.3		49.6		48.7		48.3		48.5		0.1		18,116
2019					287.3		306.3		304.7		306.0		305.9		0.8		90,185
2020							295.9		287.7		286.2		286.8		2.1		117,180
2021									341.6		348.1		349.6		7.9		151,999
2022											296.0		288.4		16.0		118,731
2023													291.2		102.4		82,578
Total													$	1,571.5	$	129.3	579,345

Cumulative Paid Losses and ALAE—Net of Reinsurance
Accident Year	2017 (unaudited)		2018 (unaudited)		2019 (unaudited)		2020 (unaudited)		2021 (unaudited)		2022 (unaudited)		2023
			(dollars in millions)
2017	$	0.6	$	0.9	$	1.0	$	1.1	$	1.1	$	1.1	$	1.1
2018			20.6		44.6		48.1		48.1		47.7		48.0
2019					177.0		277.7		296.2		302.1		304.5
2020							182.0		238.5		269.9		280.9
2021									179.4		294.6		332.3
2022											175.3		248.3
2023													133.9
Total													1,349.0
Loss and ALAE reserves—net of reinsurance													$	222.5

_______________

(1) Reported by claim event.

Schedule of Reconciliation of Claims Development to Liability


Incurred Losses and ALAE—Net of Reinsurance
Accident Year	2017 (unaudited)		2018 (unaudited)		2019 (unaudited)		2020 (unaudited)		2021 (unaudited)		2022 (unaudited)		2023		IBNR		Reported Claims(1)
			(dollars in millions)
2017	$	1.2	$	1.1	$	1.1	$	1.1	$	1.1	$	1.1	$	1.1	$	—	556
2018			42.3		48.3		49.6		48.7		48.3		48.5		0.1		18,116
2019					287.3		306.3		304.7		306.0		305.9		0.8		90,185
2020							295.9		287.7		286.2		286.8		2.1		117,180
2021									341.6		348.1		349.6		7.9		151,999
2022											296.0		288.4		16.0		118,731
2023													291.2		102.4		82,578
Total													$	1,571.5	$	129.3	579,345

Cumulative Paid Losses and ALAE—Net of Reinsurance
Accident Year	2017 (unaudited)		2018 (unaudited)		2019 (unaudited)		2020 (unaudited)		2021 (unaudited)		2022 (unaudited)		2023
			(dollars in millions)
2017	$	0.6	$	0.9	$	1.0	$	1.1	$	1.1	$	1.1	$	1.1
2018			20.6		44.6		48.1		48.1		47.7		48.0
2019					177.0		277.7		296.2		302.1		304.5
2020							182.0		238.5		269.9		280.9
2021									179.4		294.6		332.3
2022											175.3		248.3
2023													133.9
Total													1,349.0
Loss and ALAE reserves—net of reinsurance													$	222.5

_______________

(1) Reported by claim event.

Schedule of Historical Claims

The following table sets forth the historical average annual percentage payout of incurred losses and ALAE (claims duration), net of reinsurance, as of December 31, 2023:


Year	1		2		3		4		5		6		7
Incremental paid(1)	53.8	%	31.3	%	8.8	%	3.7	%	—	%	0.3	%	—	%

_______________

(1) Supplemental information and unaudited

RESTRUCTURING COSTS - Restructuring Costs Recorded In Other Liabilities (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Restructuring Reserve [Roll Forward]
Restructuring liability, beginning balance	$ 3.2	$ 0.0
Expense incurred	10.7	11.2
Payments	(5.6)	(8.0)
Restructuring liability, ending balance	8.3	3.2
Employee costs
Restructuring Reserve [Roll Forward]
Restructuring liability, beginning balance	3.1	0.0
Expense incurred	7.3	10.2
Payments	(2.1)	(7.1)
Restructuring liability, ending balance	8.3	3.1
Other costs
Restructuring Reserve [Roll Forward]
Restructuring liability, beginning balance	0.1	0.0
Expense incurred	3.4	1.0
Payments	(3.5)	(0.9)
Restructuring liability, ending balance	$ 0.0	$ 0.1

SHARE-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Share-Based Compensation Expense

The following table displays warrant compensation expense recorded in the consolidated statements of operations and comprehensive loss:


	For the Years Ended December 31,
	2023		2022		2021
	(dollars in millions)
Warrant compensation expense:
Sales and marketing	$	—	$	8.8	$	8.8
Other insurance expense (benefit)	17.4		5.7		—
Total warrant compensation expense	$	17.4	$	14.5	$	8.8

The following table displays employee share-based compensation expense recorded in the consolidated statements of operations and comprehensive loss:


	For the Years Ended December 31,
	2023		2022		2021
	(dollars in millions)
Share-based compensation expense:
Loss and loss adjustment expenses	$	0.7	$	0.7	$	1.5
Sales and marketing	0.3		0.8		1.0
Other insurance expense (benefit)	0.6		0.8		1.6
Technology and development	3.4		3.3		4.5
General and administrative	12.3		24.9		10.7
Total share-based compensation expense	$	17.3	$	30.5	$	19.3

The following table provides total employee share-based compensation expense by type of award:


	For the Years Ended December 31,
	2023		2022		2021
	(dollars in millions)
Share-based compensation expense:
Restricted stock unit expense	$	15.8	$	28.8	$	14.9
Performance-based restricted stock unit expense	0.4		—		—
Stock option expense	1.1		1.7		4.4
Total share-based compensation expense	$	17.3	$	30.5	$	19.3

Schedule of Warrants

The following table provides other key terms of the warrants:



Warrants	Exercise Price		Shares Issued (in millions)	Grant Date Fair Value per Share		Vesting Condition
Short-Term
Tranche 1	$	180.00	2.4	$	0.42	Completing the Integrated Platform
Tranche 2	$	198.00	3.2	$	0.37	50,000 policy originations
Tranche 3	$	216.00	1.6	$	0.18	75,000 policy originations
Total Short-Term			7.2

Long-Term
Tranche 1	$	180.00	1.4	$	0.42	100,000 policy originations
Tranche 2	$	225.00	1.5	$	0.35	200,000 policy originations
Tranche 3	$	270.00	1.5	$	0.24	300,000 policy originations
Tranche 4	$	405.00	1.5	$	0.09	400,000 policy originations
Tranche 5	$	540.00	1.3	$	0.04	500,000 policy originations
Total Long-Term			7.2

Share-Based Payment Arrangement, Performance Shares, Activity

The following table provides other key terms of the PSUs:



Performance-Based Restricted Stock Units	Stock Price Goals		Shares Issued	Grant Date Fair Value per Share
	(in millions, except per share amounts)
Tranches:
Tranche 1	$	16.76	—	$	7.69
Tranche 2	25.14		0.1	6.70
Tranche 3	33.52		0.1	5.87
Tranche 4	41.90		0.2	5.10
			0.4

Schedule of RSU Activity

Restricted Stock Units and Performance-Based Restricted Stock Units

A summary of RSU and PSU activity for the years ended December 31, 2023 and 2022 is as follows:


Restricted Stock Units and Performance-Based Restricted Stock Units	Number of Shares	Weighted-Average Grant Date Fair Value per Share		Aggregate Intrinsic Value
	(in millions, except per share amounts)
Nonvested at January 1, 2022	0.5	$	162.36	$	27.4
Granted	1.1	31.34
Vested	(0.1)	135.25		3.3
Forfeited, expired or canceled	(0.4)	81.38
Nonvested at December 31, 2022	1.1	$	51.81	$	5.0
Granted	1.6	6.67
Vested	(0.6)	50.53		3.4
Forfeited, expired or canceled	(0.2)	51.90
Nonvested at December 31, 2023	1.9	$	14.47	$	20.3

Schedule of Option Activity

A summary of option activity for the years ended December 31, 2023 and 2022 is as follows:


Options	Number of Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value
	(in millions, except exercise price and term amounts)
Outstanding at January 1, 2022	0.4	$	42.48	6.12	$	9.5
Granted	—	21.42
Exercised	(0.1)	6.60			1.9
Forfeited, expired or canceled	(0.1)	83.89
Outstanding at December 31, 2022	0.2	$	38.15	5.63	$	0.2
Granted	—	8.94
Exercised	—	—			—
Forfeited, expired or canceled	(0.1)	44.88
Outstanding at December 31, 2023	0.1	$	33.68	4.29	$	0.5

Schedule of Exercise Price Range

A summary of total options outstanding and exercisable at December 31, 2023:


	Options Outstanding and Exercisable
Options	Number of Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in Years)
	(in millions, except exercise price and term amounts)
Range of Exercise Prices:
$0.60 - $21.42	0.1	$	5.05	3.61
$21.42 - $130.50	—	$	67.76	5.30
$130.50 - $231.66	—	$	148.88	6.33

SHARE-BASED COMPENSATION - Schedule of Warrant Compensation Expense (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	$ 17.3	$ 30.5	$ 19.3
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	0.3	0.8	1.0
Warrant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	17.4	14.5	8.8
Warrant \| Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	0.0	8.8	8.8
Warrant \| Other insurance expense (benefit)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	$ 17.4	$ 5.7	$ 0.0

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

CAPITAL STOCK	12 Months Ended
CAPITAL STOCK	Dec. 31, 2023
Equity [Abstract]
CAPITAL STOCK	CAPITAL STOCK As of December 31, 2023, our total authorized shares consist of 1.0 billion shares of Class A common stock, 269.0 million shares of Class B common stock, and 100.0 million shares of preferred stock. In October 2021, we issued redeemable convertible preferred stock to Carvana pursuant to the Investment Agreement. We received $126.5 million of gross proceeds from the issuance of 14.1 million shares of redeemable convertible preferred stock designated as the Series A Preferred Stock, which have a redemption value of $126.5 million, and issued Carvana eight tranches of warrants to purchase shares of the Company’s Class A common stock. Further details on the warrants are discussed in Note 12, “Share-Based Compensation.” In connection with the Investment Agreement, we incurred issuance costs of $19.6 million. As of December 31, 2023, there was $3.0 million of unpaid issuance costs contingent upon certain warrant vesting milestones in connection with the Investment Agreement. We allocated the issuance costs between the preferred stock and the warrants based on their relative fair values. The warrants are recognized on a pro-rata basis considering Carvana’s progress toward achieving the milestones and the allocated issuance costs are reclassified from other assets to contra-equity on that same pro-rata basis. As of December 31, 2023, issuance costs were recognized in our consolidated balance sheets as follows: $14.5 million as contra-redeemable convertible preferred stock; $4.7 million as contra-additional paid-in capital; and $0.4 million as other assets. The carrying value of our preferred stock was $112.0 million as of December 31, 2023. In October 2021, our board of directors approved the retirement of 0.3 million shares of Class A common stock that were held in treasury at $0.8 million. The voting, dividend and liquidation rights of the holders of our Class A and Class B common stock are subject to and qualified by the rights, powers, and preferences of the holders of the preferred stock. Other rights, privileges, and preferences of our capital stock are as follows: Dividends—Class A and Class B common stock are entitled to the same dividend rights. We are not permitted to declare, pay, or set aside any dividends on shares of any other class or series of capital stock unless the holders of the preferred stock then outstanding first receive, or simultaneously receive, a dividend. Beginning after the fifth anniversary of the Integrated Platform becoming available to customers, Series A Preferred Stockholders are entitled to receive, when, as and if declared by the board of directors, a dividend at an annual rate of 5% of the liquidation preference per share of Series A Preferred Stock, if our 90-day volume-weighted average price per share of Class A common stock is below the conversion price at that time. Voting Rights—Our Class B common stock has ten votes per share and our Class A common stock has one vote per share. Holders of preferred stock are entitled to vote, together with the holders of Class A common stock and Class B common stock, on an as-converted basis on all matters submitted to a vote of the holders of Class A common stock and Class B common stock. Liquidation Preferences—In the event of any voluntary or involuntary liquidation, dissolution, or winding up of our business, after payment or provision for payment of the debts and other liabilities of the Company, the holders of Series A Preferred Stock are entitled to receive, before any distribution out of the assets of the Company may be made to or set aside for the holders of any common stock, an amount per share equal to the greater of (i) $9.00 per share plus the amount of any accrued but unpaid dividends thereon as of such date and (ii) the amount such preferred stockholders would have received had they, immediately prior to such an event, converted such shares of Series A Preferred Stock into Class A common stock. Thereafter, holders of Class A and Class B common stock are entitled to any remaining proceeds on a pro-rata basis. Class A and Class B common stock are entitled to the same liquidation rights. Conversion and Transfer—Each share of Class B common stock is convertible at any time into one share of Class A common stock. Future transfers by holders of our Class B common stock will generally result in those shares converting into shares of our Class A common stock, subject to limited exceptions, such as certain transfers effected for tax or estate planning purposes. Series A Preferred Stock shall be convertible, at the option of the holder thereof, at any time, or from time to time, into shares of Class A common stock at a conversion rate equal to the liquidation preference divided by the conversion price. As of December 31, 2023, the conversion price was $162.00 per share and the Series A Preferred Stock was convertible into 0.8 million shares of Class A common stock. To the extent that such conversion would cause the holder to hold in excess of 9.9% of the voting stock, such conversion would be subject to approval from the Ohio Director of Insurance. Redemption and Balance Sheet Classification—The redeemable convertible preferred stock is classified as mezzanine equity because while it is not mandatorily redeemable, it will become convertible or redeemable at the option of the preferred stockholder in connection with any change of control of the Company, which is considered not solely within our control.

INVESTMENTS (Tables)

12 Months Ended

Dec. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Schedule of AFS Debt Securities

The amortized cost and fair value of short-term investments and available-for-sale fixed maturity securities at December 31, 2023 and 2022 are as follows:



	2023
	Amortized Cost		Allowance for Expected Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(dollars in millions)
Fixed maturities:
U.S. Treasury securities and agencies	$	14.6	$	—	$	0.1	$	(0.1)	$	14.6
Municipal securities	24.8		—		0.1		(0.8)		24.1
Corporate debt securities	66.3		—		0.2		(1.3)		65.2
Residential mortgage-backed securities	12.0		—		0.1		(0.2)		11.9
Commercial mortgage-backed securities	30.4		—		0.1		(0.7)		29.8
Other debt obligations	20.3		—		0.1		(0.1)		20.3
Total fixed maturities	168.4		—		0.7		(3.2)		165.9
Short-term investments	0.9		—		—		—		0.9
Total	$	169.3	$	—	$	0.7	$	(3.2)	$	166.8


	2022
	Amortized Cost		Allowance for Expected Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(dollars in millions)
Fixed maturities:
U.S. Treasury securities and agencies	$	11.3	$	—	$	—	$	(0.3)	$	11.0
Municipal securities	21.4		—		—		(1.2)		20.2
Corporate debt securities	60.5		—		—		(2.7)		57.8
Residential mortgage-backed securities	5.5		—		—		(0.3)		5.2
Commercial mortgage-backed securities	24.4		—		—		(1.2)		23.2
Other debt obligations	11.1		—		0.1		(0.2)		11.0
Total fixed maturities	134.2		—		0.1		(5.9)		128.4
Short-term investments	0.4		—		—		—		0.4
Total	$	134.6	$	—	$	0.1	$	(5.9)	$	128.8

The following table reflects the gross and net realized gains and losses on short-term investments, available-for-sale fixed maturities and other investments that have been included in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2023, 2022 and 2021:


	For the Years Ended December 31,
	2023		2022		2021
	(dollars in millions)
Realized gains on investments	$	—	$	1.2	$	2.5
Realized losses on investments	—		(0.7)		(0.1)
Net realized gains on investments	$	—	$	0.5	$	2.4

The following table sets forth the amortized cost and fair value of short-term investments and available-for-sale fixed maturity securities by contractual maturity at December 31, 2023:


	2023
	Amortized Cost		Fair Value
	(dollars in millions)
Due in one year or less	$	25.7	$	25.4
Due after one year through five years	110.4		108.7
Due five years through 10 years	16.5		16.5
Due after 10 years	16.7		16.2
Total	$	169.3	$	166.8

Schedule of Unrealized Losses

The following tables reflect the gross unrealized losses and fair value of short-term investments and available-for-sale fixed maturity securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2023 and 2022:


	2023
	Less than 12 Months						12 Months or More				Total
	Fair Value				Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
	(dollars in millions)
Fixed maturities:
U.S. Treasury securities and agencies	$	1.7			$	—	$	2.4	$	(0.1)	$	4.1	$	(0.1)
Municipal securities	3.1				—		15.1		(0.8)		18.2		(0.8)
Corporate debt securities	13.4				—		35.1		(1.3)		48.5		(1.3)
Residential mortgage-backed securities	4.1				—		1.9		(0.2)		6.0		(0.2)
Commercial mortgage-backed securities	9.1				(0.1)		13.4		(0.6)		22.5		(0.7)
Other debt obligations	4.4				—		4.4		(0.1)		8.8		(0.1)
Total fixed maturities	35.8				(0.1)		72.3		(3.1)		108.1		(3.2)
Short-term investments	0.3				—		—		—		0.3		—
Total	$	36.1			$	(0.1)	$	72.3	$	(3.1)	$	108.4	$	(3.2)

	2022
	Less than 12 Months						12 Months or More				Total
	Fair Value				Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
	(dollars in millions)
Fixed maturities:
U.S. Treasury securities and agencies	$	6.9	$	—	$	(0.1)	$	4.1	$	(0.2)	$	11.0	$	(0.3)
Municipal securities	11.5				(0.5)		8.2		(0.7)		19.7		(1.2)
Corporate debt securities	45.3				(1.6)		11.5		(1.1)		56.8		(2.7)
Residential mortgage-backed securities	2.2				—		1.9		(0.3)		4.1		(0.3)
Commercial mortgage-backed securities	18.3				(0.8)		4.6		(0.4)		22.9		(1.2)
Other debt obligations	6.8				(0.2)		—		—		6.8		(0.2)
Total fixed maturities	91.0				(3.2)		30.3		(2.7)		121.3		(5.9)
Short-term investments	0.1				—		—		—		0.1		—
Total	$	91.1			$	(3.2)	$	30.3	$	(2.7)	$	121.4	$	(5.9)

Schedule of Net Investment Income

The following table sets forth the components of net investment income for the years ended December 31, 2023, 2022 and 2021:


	For the Years Ended December 31,
	2023		2022		2021
	(dollars in millions)
Interest on bonds	$	4.8	$	2.4	$	2.4
Interest on deposits and cash equivalents	28.0		5.7		1.1
Other investments(1)	—		—		3.8
Total	32.8		8.1		7.3
Investment expense	(2.6)		(1.9)		(2.3)
Net investment income	$	30.2	$	6.2	$	5.0

______________

(1) Unrealized gains resulting from observable price changes related to our private equity investments.

Schedule of Credit Ratings

The following tables summarize the credit ratings of short-term investments and available-for-sale fixed maturity securities at December 31, 2023 and 2022:


	December 31, 2023
	Amortized Cost		Fair Value		% of Total Fair Value
S&P Global rating or equivalent	(dollars in millions)
AAA	$	53.0	$	52.1	31.2	%
AA+, AA, AA-, A-1	59.4		58.8		35.3
A+, A, A-	42.1		41.2		24.7
BBB+, BBB, BBB-	14.8		14.7		8.8
Total	$	169.3	$	166.8	100.0	%



	December 31, 2022
	Amortized Cost		Fair Value		% of Total Fair Value
S&P Global rating or equivalent	(dollars in millions)
AAA	$	62.5	$	59.9	46.5	%
AA+, AA, AA-, A-1	19.9		19.1		14.8
A+, A, A-	38.4		36.5		28.3
BBB+, BBB, BBB-	13.8		13.3		10.4
Total	$	134.6	$	128.8	100.0	%

- Definition

Tabular disclosure of investment in debt security measured at fair value with change in fair value recognized in other comprehensive income (available-for-sale).

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-9

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (aa)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (aaa)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 11: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

+ Details

- Definition

Tabular disclosure of all significant concentrations of risk, including credit risk and market risk, arising from all financial instruments (as defined), whether from an individual counterparty or groups of counterparties. The disclosure concerning concentrations of risk may consist of the following information: (1) for concentrations of credit risk disclosure may include: (a) information about the (shared) activity, region, or economic characteristic that identifies the concentration, (b) the maximum amount of loss due to credit risk that, based on the gross fair value of the financial instrument, the entity would incur if parties to the financial instruments that make up the concentration failed completely to perform according to the terms of the contracts and the collateral or other security, if any, for the amount due proved to be of no value to the entity, (c) the policy of requiring collateral or other security to support financial instruments subject to credit risk, information about the entity's access to that collateral or other security, and the nature and a brief description of the collateral or other security supporting those financial instruments, and (d) the policy of entering into master netting arrangements to mitigate the credit risk of financial instruments, information about the arrangements for which the entity is a party, and a brief description of the terms of those arrangements, including the extent to which they would reduce the entity's maximum amount of loss due to credit risk and (2) for disclosure of quantitative information about the market risks of financial instruments that is consistent with the way the company manages or adjusts those risks, disclosure may include: (a) more details about current positions and perhaps activity during the period, (b) the hypothetical effects on comprehensive income (or net assets), or annual income, of several possible changes in market prices, (c) a gap analysis of interest rate re-pricing or maturity dates, (d) the duration of the financial instruments, (e) the entity's value at risk from derivatives and from other positions at the end of the reporting period and the average value at risk during the year, or (f) other ways of reporting quantitative information as internally developed.

+ References + Details

SHARE-BASED COMPENSATION - Schedule of Exercise Price Range (Details) shares in Millions	12 Months Ended
	Dec. 31, 2023 $ / shares shares
$0.60 - $21.42
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price range, min (in dollars per share)	$ 0.60
Exercise price range, max (in dollars per share)	$ 21.42
Options outstanding, number of shares (in shares) \| shares	0.1
Options exercisable, number of shares (in shares) \| shares	0.1
Options outstanding, weighted-average exercise price (in dollars per share)	$ 5.05
Options exercisable, weighted-average exercise price (in dollars per share)	$ 5.05
Options outstanding, weighted-average remaining contractual term (in years)	3 years 7 months 9 days
Options exercisable, weighted-average remaining contractual term (in years)	3 years 7 months 9 days
$21.42 - $130.50
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price range, min (in dollars per share)	$ 21.42
Exercise price range, max (in dollars per share)	$ 130.50
Options outstanding, number of shares (in shares) \| shares	0.0
Options exercisable, number of shares (in shares) \| shares	0.0
Options outstanding, weighted-average exercise price (in dollars per share)	$ 67.76
Options exercisable, weighted-average exercise price (in dollars per share)	$ 67.76
Options outstanding, weighted-average remaining contractual term (in years)	5 years 3 months 18 days
Options exercisable, weighted-average remaining contractual term (in years)	5 years 3 months 18 days
$130.50 - $231.66
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price range, min (in dollars per share)	$ 130.50
Exercise price range, max (in dollars per share)	$ 231.66
Options outstanding, number of shares (in shares) \| shares	0.0
Options exercisable, number of shares (in shares) \| shares	0.0
Options outstanding, weighted-average exercise price (in dollars per share)	$ 148.88
Options exercisable, weighted-average exercise price (in dollars per share)	$ 148.88
Options outstanding, weighted-average remaining contractual term (in years)	6 years 3 months 29 days
Options exercisable, weighted-average remaining contractual term (in years)	6 years 3 months 29 days

LEASES - Schedule of Lease Cost (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Leases [Abstract]
Operating lease liabilities	$ 8.2	$ 10.5
Operating lease, liability, statement of financial position [Extensible Enumeration]	Other liabilities	Other liabilities
Operating lease right-of-use assets	$ 3.5	$ 4.3
Operating lease, right-of-use asset, statement of financial position [Extensible Enumeration]	Other assets	Other assets
Operating lease, costs	$ 1.8	$ 2.1	$ 5.0
Operating cash flows paid for amounts included in the measurement of lease liabilities	$ 3.2	$ 3.9	$ 3.8
Weighted average of remaining operating lease term (years)	3 years 9 months 18 days	4 years 7 months 6 days
Weighted average operating lease discount rate	11.80%	11.80%

STATUTORY FINANCIAL INFORMATION

12 Months Ended

Dec. 31, 2023

Insurance [Abstract]

STATUTORY FINANCIAL INFORMATION

LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES

The following provides a reconciliation of the beginning and ending reserve balances for loss and LAE, net of reinsurance:


	2023		2022		2021
	(dollars in millions)
Gross loss and LAE reserves, January 1	$	287.4	$	320.2	$	237.2
Reinsurance recoverable on unpaid losses	(76.4)		(79.5)		(79.6)
Net loss and LAE reserves, January 1	211.0		240.7		157.6
Net incurred loss and LAE related to:
Current year	338.3		348.1		405.9
Prior years	(7.0)		2.9		(13.6)
Total incurred	331.3		351.0		392.3
Net paid loss and LAE related to:
Current year	165.9		215.6		226.4
Prior years	136.0		165.1		82.8
Total paid	301.9		380.7		309.2
Net loss and LAE reserves, December 31	240.4		211.0		240.7
Plus reinsurance recoverable on unpaid losses	43.8		76.4		79.5
Gross loss and LAE reserves, December 31	$	284.2	$	287.4	$	320.2

Incurred losses and LAE attributable to prior accident years was a decrease of $7.0 million, an increase of $2.9 million and a decrease of $13.6 million during 2023, 2022 and 2021, respectively.

The decrease to incurred losses for prior accident years in 2023 of $7.0 million was primarily driven by lower-than-expected reported losses from accident year 2022 related to liability and physical damage coverages.

The increase to incurred losses for prior accident years in 2022 of $2.9 million was primarily driven by higher-than-expected reported losses from accident year 2021 material damage claims due to higher replacement parts cost and growth in used car values.

The decrease to incurred losses for prior accident years in 2021 of approximately $13.6 million was primarily due to lower-than-expected reported losses on bodily injury claims, and higher than expected subrogation and salvage recoveries from accident year 2020 material damage claims.


Incurred Losses and ALAE—Net of Reinsurance
Accident Year	2017 (unaudited)		2018 (unaudited)		2019 (unaudited)		2020 (unaudited)		2021 (unaudited)		2022 (unaudited)		2023		IBNR		Reported Claims(1)
			(dollars in millions)
2017	$	1.2	$	1.1	$	1.1	$	1.1	$	1.1	$	1.1	$	1.1	$	—	556
2018			42.3		48.3		49.6		48.7		48.3		48.5		0.1		18,116
2019					287.3		306.3		304.7		306.0		305.9		0.8		90,185
2020							295.9		287.7		286.2		286.8		2.1		117,180
2021									341.6		348.1		349.6		7.9		151,999
2022											296.0		288.4		16.0		118,731
2023													291.2		102.4		82,578
Total													$	1,571.5	$	129.3	579,345

Cumulative Paid Losses and ALAE—Net of Reinsurance
Accident Year	2017 (unaudited)		2018 (unaudited)		2019 (unaudited)		2020 (unaudited)		2021 (unaudited)		2022 (unaudited)		2023
			(dollars in millions)
2017	$	0.6	$	0.9	$	1.0	$	1.1	$	1.1	$	1.1	$	1.1
2018			20.6		44.6		48.1		48.1		47.7		48.0
2019					177.0		277.7		296.2		302.1		304.5
2020							182.0		238.5		269.9		280.9
2021									179.4		294.6		332.3
2022											175.3		248.3
2023													133.9
Total													1,349.0
Loss and ALAE reserves—net of reinsurance													$	222.5

_______________

(1) Reported by claim event.


	2023		2022
	(dollars in millions)
Loss and ALAE reserves—net of reinsurance	$	222.5	$	195.0
ULAE reserves—net of reinsurance	17.9		16.0
Reinsurance recoverables on unpaid losses	43.8		76.4
Total loss and LAE reserves—gross of reinsurance	$	284.2	$	287.4

The following table sets forth the historical average annual percentage payout of incurred losses and ALAE (claims duration), net of reinsurance, as of December 31, 2023:


Year	1		2		3		4		5		6		7
Incremental paid(1)	53.8	%	31.3	%	8.8	%	3.7	%	—	%	0.3	%	—	%

_______________

(1) Supplemental information and unauditedSTATUTORY FINANCIAL INFORMATION

Root Insurance Company and Root Property & Casualty, or our insurance subsidiaries, are required to prepare statutory financial statements in conformity with the basis of accounting practices prescribed or permitted by the Ohio Department of Insurance. Ohio has adopted the National Association of Insurance Commissioners, or NAIC Accounting Practices and Procedures Manual as the basis of their statutory accounting practices. Root Insurance Company and Root Property & Casualty’s statutory capital and surplus as of December 31, 2023 and 2022 and statutory net loss for the years ended December 31, 2023, 2022 and 2021 are as follows:


	Statutory Net Loss						Statutory Capital and Surplus
	2023		2022		2021		2023		2022
	(in millions)
Root Insurance Company	$	(44.4)	$	(125.7)	$	(126.9)	$	60.1	$	77.0
Root Property & Casualty	(12.2)		(30.8)		(33.4)		21.3		20.3
Total	$	(56.6)	$	(156.5)	$	(160.3)	$	81.4	$	97.3

The payment of dividends by our insurance subsidiaries is subject to restrictions set forth in the insurance laws and regulations of the State of Ohio. These insurance laws require domestic insurance companies to notify the supervisory superintendent, commissioner and/or director to seek prior regulatory approval to pay a dividend or distribute cash or other property if the fair market value thereof, together with that of other dividends or distributions made in the preceding twelve months, exceeds the greater of (1) 10% of statutory-basis policyholders' surplus as of the prior December 31 or (2) the statutory-basis net income of the insurer as of the prior December 31. During the years ended December 31, 2023, 2022 and 2021, Root Insurance Company and Root Property & Casualty did not pay any dividends.

The insurance laws also require domestic insurers to seek prior regulatory approval for any dividend paid from other than earned surplus. Earned surplus is defined under the insurance laws as the amount equal to our unassigned funds as set forth in its most recent statutory financial statements, including net unrealized capital gains and losses. Additionally, following any dividend, an insurers policyholder surplus must be reasonable in relation to the insurer's outstanding liabilities and adequate for its financial needs.

The NAIC Risk-Based Capital, or RBC, model law requires every insurer to calculate its total adjusted capital and RBC requirement to ensure insurer solvency. Regulatory guidelines provide for an insurance commissioner to intervene if the insurer experiences financial difficulty, as evidenced by a company's total adjusted capital falling below established relationships to required RBC. The model includes components for asset risk, underwriting risk, credit risk and other factors. The State of Ohio imposes a minimum RBC requirement that is developed by the NAIC. The formulas in the model for determining the amount of RBC specify various weighting factors that are applied to financial balances or various levels of activity based on the perceived degree of risk. Regulatory compliance is determined by a ratio of total adjusted capital to authorized control level RBC, as defined by the

NAIC. Companies below specific trigger points or ratios are classified within certain levels, all of which require specified corrective action. Root Insurance Company and Root Property & Casualty’s capital and surplus exceeded its authorized control level RBC of $12.8 million and $2.8 million for the year ended December 31, 2023, respectively, and $17.4 million and $4.1 million for the year ended December 31, 2022, respectively.

RESTRUCTURING COSTS - Schedule of Restructuring Costs Recorded In Consolidated Statements Of Operations And Comprehensive Loss (Details) - General and administrative - USD ($) $ in Millions	12 Months Ended			24 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2023
Restructuring Cost and Reserve [Line Items]
Total restructuring costs	$ 11.2	$ 18.6	$ 0.0	$ 29.8
Employee costs
Restructuring Cost and Reserve [Line Items]
Total restructuring costs	7.7	15.5	0.0	23.2
Real estate exit costs
Restructuring Cost and Reserve [Line Items]
Total restructuring costs	0.0	2.1	0.0	2.1
Other costs
Restructuring Cost and Reserve [Line Items]
Total restructuring costs	$ 3.5	$ 1.0	$ 0.0	$ 4.5

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

INCOME TAXES

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

The following table displays income tax expense (benefit) for the years ended December 31, 2023, 2022 and 2021:


	For the Years Ended December 31,
	2023		2022		2021
	(dollars in millions)
Current:
Federal	$	—	$	—	$	—
State	—		—		—

Total current	—		—		—
Deferred:
Federal	—		—		—
State	—		—		—

Total deferred	—		—		—
Total income tax expense (benefit)	$	—	$	—	$	—

The income tax expense (benefit) differed from the amounts computed by applying the statutory U.S. federal income tax rate of 21% in 2023, 2022 and 2021 to pretax income as a result of the following:


	2023				2022				2021
	(dollars in millions)
Loss before income taxes	$	(147.4)			$	(297.7)			$	(521.1)
Statutory U.S. federal income tax benefit	(30.9)		21.0	%	(62.5)		21.0	%	(109.4)		21.0	%
Valuation allowance on deferred tax assets	34.9		(23.7)		65.8		(22.1)		116.7		(22.4)

Share-based compensation	5.5		(3.7)		4.9		(1.6)		(3.3)		0.6
Nondeductible compensation	1.2		(0.8)		1.3		(0.4)		1.8		(0.3)
Return to provision permanent adjustments	—		—		(3.5)		1.2		(0.5)		0.1
State net operating loss	(10.5)		7.1		(7.1)		2.4		(4.9)		0.9
Other	(0.2)		0.1		1.1		(0.5)		(0.4)		0.1
Income tax expense (benefit)	$	—	—	%	$	—	—	%	$	—	—	%

The following table sets forth the tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2023 and 2022:


	2023		2022
	(dollars in millions)
Deferred tax assets:
Unpaid losses and loss adjustment expenses	$	2.1	$	1.9
Unearned premium reserves	10.0		2.7



Disallowed interest carryforward	19.4		16.5



Deferred compensation	7.3		6.1
Stock and warrant compensation	10.2		9.5


Other	6.0		7.8
State net operating loss carryforward	27.9		17.4
Net operating loss carryforward	280.6		266.4
Gross deferred assets	363.5		328.3
Less valuation allowance	(356.4)		(322.3)
Total deferred tax assets, less valuation allowance	7.1		6.0
Deferred tax liabilities:
Research and experimental expenditures	1.1		2.0
Fixed assets	0.7		1.3
Deferred policy acquisition costs	3.8		1.5
Intangible assets	0.4		0.3
Investments	1.0		0.8
Other	0.1		0.1
Deferred tax liabilities	7.1		6.0
Net deferred tax asset	$	—	$	—

The above amounts were calculated in accordance with ASC 740, Income Taxes. The application of ASC 740 requires a company to evaluate the recoverability of deferred tax assets and to establish a valuation allowance if necessary to reduce the carrying value of the deferred tax asset to an amount which is more likely than not to be realized. Considerable judgment is required in determining whether a valuation allowance is necessary, and if so, the amount of such valuation allowance. In evaluating the need for a valuation allowance we include many factors, including: (1) the nature of the deferred tax assets and liabilities; (2) whether they are ordinary or capital; (3) the

timing of expected reversal; (4) taxable income in prior carry back years as well as projected taxable earnings exclusive of reversing temporary differences and carry forwards; (5) the length of time that carryovers can be used; (6) unique tax rules that would impact the utilization of the deferred tax assets; and (7) any tax planning strategies that we would employ to avoid a tax benefit expiring unused. Although lack of realization is not assured, we believe it is more likely than not that the deferred tax assets will not be realized. As such, a valuation allowance of $356.4 million has been established. The valuation allowance increased by $34.1 million and $67.3 million for the years ended December 31, 2023 and 2022, respectively, primarily due to our net operating loss.

We have experienced an ownership change under Section 382 of the Internal Revenue Code, or the Code. Accordingly, use of a portion of our net operating losses, or NOLs, and tax credit carryforwards are subject to an annual limitation under Section 382 of the Code. We do not expect any of our deferred tax assets related to our NOLs or tax credit carryforwards to expire unutilized as a result of this limitation.

The following table sets forth carryforwards related to NOLs and tax credits:


	Carryforward with Expiration		Carryforward Indefinitely		Total		Years of Expiration
	(dollars in millions)
Federal	$	662.4	$	673.8	$	1,336.2	2035 - 2043
State (gross, apportioned)	173.4		267.8		441.2		2024 - 2043
Research and development credits	0.9		—		0.9		2036 - 2038
Total	$	836.7	$	941.6	$	1,778.3

We file a consolidated federal income tax return and certain state income tax returns. Tax years 2020 and forward are still subject to U.S. federal examinations. The federal statute of limitations is generally three years. Currently all state income and franchise tax returns are within each taxing authorities statute of limitations and are subject to examination.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482526/740-270-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-17

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

STATUTORY FINANCIAL INFORMATION (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Statutory Accounting Practices [Line Items]
Statutory Net Loss	$ (56.6)	$ (156.5)	$ (160.3)
Statutory Capital and Surplus	81.4	97.3
Root Insurance Company
Statutory Accounting Practices [Line Items]
Statutory Net Loss	(44.4)	(125.7)	(126.9)
Statutory Capital and Surplus	60.1	77.0
Authorized control level RBC	12.8	17.4
Root Property & Casualty
Statutory Accounting Practices [Line Items]
Statutory Net Loss	(12.2)	(30.8)	$ (33.4)
Statutory Capital and Surplus	21.3	20.3
Authorized control level RBC	$ 2.8	$ 4.1

NATURE OF BUSINESS (Details)	Dec. 31, 2023
Root Insurance Company
Schedule of Equity Method Investments [Line Items]
Ownership percentage (as percent)	100.00%
Root Reinsurance Company, Ltd.
Schedule of Equity Method Investments [Line Items]
Ownership percentage (as percent)	100.00%
Root Property & Casualty Insurance Company
Schedule of Equity Method Investments [Line Items]
Ownership percentage (as percent)	100.00%

CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY - USD ($) shares in Millions, $ in Millions	Total	Class A Shares	Class B Shares	Class A and Class B Convertible Common Stock	Class A and Class B Convertible Common Stock Class A Shares	Class A and Class B Convertible Common Stock Class B Shares	Treasury Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Loss
Beginning balance (in shares) at Dec. 31, 2020	0.0
Beginning balance at Dec. 31, 2020	$ 0.0
Increase (Decrease) in Temporary Equity [Roll Forward]
Preferred stock issued (in shares)	14.1
Preferred stock issued	$ 126.5
Preferred stock and related warrants issuance costs	$ (14.5)
Ending balance (in shares) at Dec. 31, 2021	14.1
Ending balance at Dec. 31, 2021	$ 112.0
Beginning balance (in shares) at Dec. 31, 2020					3.3	10.7
Treasury stock, beginning balance (in shares) at Dec. 31, 2020							0.3
Beginning balance at Dec. 31, 2020	1,031.4			$ 0.0			$ (0.8)	$ 1,775.6	$ 5.6	$ (749.0)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(521.1)									(521.1)
Other comprehensive income (loss)	(5.2)								(5.2)
Conversion of Class B to Class A common stock (in shares)					4.5	(4.5)
Common stock—option exercises and restricted stock units vesting, net of shares withheld for employee taxes (in shares)					0.1
Common stock—option exercises and restricted stock units vesting, net of shares withheld for employee taxes	4.4							4.4
Reclassification of early-exercised stock option to liabilities (in shares)						(0.1)
Reclassification of early-exercised stock option to liabilities	(0.2)							(0.2)
Common stock—share-based compensation expense	19.3							19.3
Warrant compensation expense	8.8							8.8
Retirement of treasury shares (in shares)							(0.3)
Retirement of treasury shares	0.0						$ 0.8	(0.8)
Warrants issuance costs	(1.0)							(1.0)
Treasury stock, ending balance (in shares) at Dec. 31, 2021							0.0
Ending balance (in shares) at Dec. 31, 2021					7.9	6.1
Ending balance at Dec. 31, 2021	$ 536.4			0.0			$ 0.0	1,806.1	0.4	(1,270.1)
Ending balance (in shares) at Dec. 31, 2022	14.1
Ending balance at Dec. 31, 2022	$ 112.0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(297.7)									(297.7)
Other comprehensive income (loss)	$ (6.2)								(6.2)
Conversion of Class B to Class A common stock (in shares)					1.1	(1.1)
Common stock—option exercises and restricted stock units vesting, net of shares withheld for employee taxes (in shares)	0.1				0.2
Common stock—option exercises and restricted stock units vesting, net of shares withheld for employee taxes	$ 0.4							0.4
Reclassification of early-exercised stock option to liabilities	0.2							0.2
Common stock—share-based compensation expense	30.5							30.5
Warrant compensation expense	14.5							14.5
Warrants issuance costs	(1.6)							(1.6)
Term Loan warrants issued	0.6							0.6
Treasury stock, ending balance (in shares) at Dec. 31, 2022							0.0
Ending balance (in shares) at Dec. 31, 2022		9.2	5.0		9.2	5.0
Ending balance at Dec. 31, 2022	$ 277.1			0.0			$ 0.0	1,850.7	(5.8)	(1,567.8)
Ending balance (in shares) at Dec. 31, 2023	14.1
Ending balance at Dec. 31, 2023	$ 112.0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(147.4)									(147.4)
Other comprehensive income (loss)	$ 3.3								3.3
Common stock—option exercises and restricted stock units vesting, net of shares withheld for employee taxes (in shares)	0.0				0.3
Reclassification of early-exercised stock option to liabilities	$ 0.1							0.1
Common stock—share-based compensation expense	17.3							17.3
Warrant compensation expense	17.4							17.4
Warrants issuance costs	(2.1)							(2.1)
Treasury stock, ending balance (in shares) at Dec. 31, 2023							0.0
Ending balance (in shares) at Dec. 31, 2023		9.5	5.0		9.5	5.0
Ending balance at Dec. 31, 2023	$ 165.7			$ 0.0			$ 0.0	$ 1,883.4	$ (2.5)	$ (1,715.2)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Revenues:
Net premiums earned	$ 399.9	$ 285.9	$ 310.3
Net investment income	30.2	6.2	5.0
Net realized gains on investments	0.0	0.5	2.4
Fee income	23.4	16.5	20.9
Other income	1.5	1.7	6.8
Total revenues	455.0	310.8	345.4
Operating expenses:
Loss and loss adjustment expenses	331.3	351.0	392.3
Sales and marketing	49.3	48.0	270.2
Other insurance expense (benefit)	47.6	(8.0)	5.0
Technology and development	44.8	55.5	65.5
General and administrative	83.3	127.4	97.6
Total operating expenses	556.3	573.9	830.6
Operating loss	(101.3)	(263.1)	(485.2)
Interest expense	(46.1)	(34.6)	(20.0)
Loss on early extinguishment of debt	0.0	0.0	(15.9)
Loss before income tax expense	(147.4)	(297.7)	(521.1)
Income tax expense	0.0	0.0	0.0
Net loss	(147.4)	(297.7)	(521.1)
Other comprehensive income (loss):
Changes in net unrealized gains (losses) on investments	3.3	(6.2)	(5.2)
Comprehensive loss	$ (144.1)	$ (303.9)	$ (526.3)
Loss per common share: basic (both Class A and B) (in dollars per share)	$ (10.24)	$ (21.11)	$ (37.76)
Loss per common share: diluted (both Class A and B) (in dollars per share)	$ (10.24)	$ (21.11)	$ (37.76)
Weighted-average common shares outstanding: basic (both Class A and B) (in shares)	14.4	14.1	13.8
Weighted-average common shares outstanding: diluted (both Class A and B) (in shares)	14.4	14.1	13.8

INVESTMENTS - Credit Ratings (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 169.3	$ 134.6
Fair Value	$ 166.8	$ 128.8
AFS Securities \| Credit rating
Debt Securities, Available-for-sale [Line Items]
Concentration percentage (in percent)	100.00%	100.00%
AAA
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 53.0	$ 62.5
Fair Value	$ 52.1	$ 59.9
AAA \| AFS Securities \| Credit rating
Debt Securities, Available-for-sale [Line Items]
Concentration percentage (in percent)	31.20%	46.50%
AA+, AA, AA-, A-1
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 59.4	$ 19.9
Fair Value	$ 58.8	$ 19.1
AA+, AA, AA-, A-1 \| AFS Securities \| Credit rating
Debt Securities, Available-for-sale [Line Items]
Concentration percentage (in percent)	35.30%	14.80%
A+, A, A-
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 42.1	$ 38.4
Fair Value	$ 41.2	$ 36.5
A+, A, A- \| AFS Securities \| Credit rating
Debt Securities, Available-for-sale [Line Items]
Concentration percentage (in percent)	24.70%	28.30%
BBB+, BBB, BBB-
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 14.8	$ 13.8
Fair Value	$ 14.7	$ 13.3
BBB+, BBB, BBB- \| AFS Securities \| Credit rating
Debt Securities, Available-for-sale [Line Items]
Concentration percentage (in percent)	8.80%	10.40%

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Investments:
Fixed maturities available-for-sale, at fair value (amortized cost: $168.4 and $134.2 at December 31, 2023 and December 31, 2022, respectively)	$ 165.9	$ 128.4
Short-term investments (amortized cost: $0.9 and $0.4 at December 31, 2023 and December 31, 2022, respectively)	0.9	0.4
Other investments	4.4	4.4
Total investments	171.2	133.2
Cash and cash equivalents	678.7	762.1
Restricted cash	1.0	1.0
Premiums receivable, net of allowance of $4.0 and $2.8 at December 31, 2023 and December 31, 2022, respectively	247.1	111.9
Reinsurance recoverable and receivable, net of allowance of $1.8 and $0.2 at December 31, 2023 and December 31, 2022, respectively	125.3	148.8
Prepaid reinsurance premiums	48.2	74.2
Other assets	76.2	81.7
Total assets	1,347.7	1,312.9
Liabilities:
Loss and loss adjustment expense reserves	284.2	287.4
Unearned premiums	283.7	136.5
Long-term debt and warrants	299.0	295.4
Reinsurance premiums payable	54.4	119.8
Accounts payable and accrued expenses	65.6	39.7
Other liabilities	83.1	45.0
Total liabilities	1,070.0	923.8
Commitments and Contingencies (Note 13)
Redeemable convertible preferred stock, $0.0001 par value, 14.1 shares issued and outstanding at December 31, 2023 and December 31, 2022 (redemption value of $126.5) (Note 11)	112.0	112.0
Stockholders’ equity:
Additional paid-in capital	1,883.4	1,850.7
Accumulated other comprehensive loss	(2.5)	(5.8)
Accumulated loss	(1,715.2)	(1,567.8)
Total stockholders’ equity	165.7	277.1
Total liabilities, redeemable convertible preferred stock and stockholders’ equity	1,347.7	1,312.9
Class A Shares
Stockholders’ equity:
Common stock	0.0	0.0
Class B Shares
Stockholders’ equity:
Common stock	$ 0.0	$ 0.0

REINSURANCE

12 Months Ended

Dec. 31, 2023

Insurance [Abstract]

REINSURANCE

The following table reflects amounts affecting the consolidated balance sheets and statements of operations and comprehensive loss for reinsurance as of and for the years ended December 31:


	2023		2022		2021
	(dollars in millions)
Loss and LAE reserves:
Direct	$	253.4	$	269.3	$	313.2
Assumed	30.8		18.1		7.0
Ceded	(43.8)		(76.4)		(79.5)
Net loss and LAE reserves	$	240.4	$	211.0	$	240.7
Unearned premiums:
Direct	$	235.4	$	125.8	$	170.6
Assumed	48.3		10.7		9.5
Ceded	(48.2)		(74.2)		(100.8)
Net unearned premiums	$	235.5	$	62.3	$	79.3
Premiums written:
Direct	$	674.6	$	556.8	$	725.9
Assumed	108.5		43.2		16.7
Ceded	(209.9)		(331.2)		(397.3)
Net premiums written	$	573.2	$	268.8	$	345.3
Premiums earned:
Direct	$	564.9	$	601.6	$	712.3
Assumed	70.9		42.0		7.3
Ceded	(235.9)		(357.7)		(409.3)
Net premiums earned	$	399.9	$	285.9	$	310.3
Losses and LAE incurred:
Direct	$	424.1	$	549.8	$	683.9
Assumed	51.7		44.9		10.9
Ceded	(144.5)		(243.7)		(302.5)
Net losses and LAE incurred	$	331.3	$	351.0	$	392.3

and receivable decreased by $35.1 million, prepaid reinsurance premiums were reduced by $34.6 million and reinsurance premiums payable decreased by $37.3 million.

GEOGRAPHICAL BREAKDOWN OF GROSS PREMIUMS WRITTEN

Gross premiums written by state is as follows for the years ended December 31, 2023, 2022 and 2021:


	For the Years Ended December 31,
	2023				2022				2021
	Amount		% of Total		Amount		% of Total		Amount		% of Total
	(dollars in millions)
State:
Texas	$	134.3	17.1	%	$	109.3	18.2	%	$	152.3	20.5	%
Georgia	94.3		12.0		62.3		10.4		79.2		10.7
Colorado	53.6		6.8		40.6		6.8		33.5		4.5
Pennsylvania	45.2		5.8		34.9		5.8		39.8		5.4
Arizona	35.4		4.5		17.1		2.9		23.5		3.2
South Carolina	34.4		4.4		20.1		3.4		26.3		3.5
Utah	30.8		3.9		30.9		5.2		33.8		4.6
Ohio	26.7		3.4		15.1		2.5		18.0		2.4
Oklahoma	23.6		3.0		19.8		3.3		22.5		3.0
Missouri	22.9		2.9		17.2		2.9		24.7		3.3
All others states	281.9		36.2		232.7		38.6		289.0		38.9
Total	$	783.1	100.0	%	$	600.0	100.0	%	$	742.6	100.0	%

OTHER COMPREHENSIVE INCOME (LOSS) AND ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

12 Months Ended

Dec. 31, 2023

Equity [Abstract]

OTHER COMPREHENSIVE INCOME (LOSS) AND ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

The following table presents the changes in our accumulated other comprehensive (loss) income, or AOCI, for the years ended December 31, 2023, 2022 and 2021:


	For the Years Ended December 31,
	2023		2022		2021
	(dollars in millions)

Beginning balance	$	(5.8)	$	0.4	$	5.6
Other comprehensive income (loss) before reclassifications	3.3		(6.9)		(2.8)
Net realized losses (gains) on investments reclassified from AOCI to net loss	—		0.7		(2.4)
Other comprehensive income (loss)	3.3		(6.2)		(5.2)
Ending balance	$	(2.5)	$	(5.8)	$	0.4

LONG-TERM DEBT - Schedule Of Debt (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Accrued interest payable	$ 7.9	$ 7.3
Unamortized discount and debt issuance costs and warrants	(8.9)	(11.9)
Total	299.0	295.4
Secured debt \| Term Loan
Debt Instrument [Line Items]
Term Loan	$ 300.0	$ 300.0

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 835
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482900/835-30-50-1

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(f))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 3
-Subparagraph (SX 210.12-04(a))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-3

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/exampleRef
-Topic 470
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-Name Accounting Standards Codification
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Reference 7: http://www.xbrl.org/2003/role/exampleRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/exampleRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Section 50
-Paragraph 1B
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
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+ Details

- Definition

Amount, after deduction of unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

COVER PAGE - USD ($) $ in Millions	12 Months Ended
COVER PAGE - USD ($) $ in Millions	Dec. 31, 2023	Feb. 15, 2024	Jun. 30, 2023
Document Information [Line Items]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2023
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	001-39658
Entity Registrant Name	ROOT, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	84-2717903
Entity Address, Address Line One	80 E. Rich Street
Entity Address, Address Line Two	Suite 500
Entity Address, City or Town	Columbus
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	43215
City Area Code	866
Local Phone Number	980-9431
Title of 12(b) Security	Class A common stock,$0.0001 par value per share
Trading Symbol	ROOT
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Document Financial Statement Error Correction Flag	false
Entity Shell Company	false
Entity Public Float			$ 80.3
Documents Incorporated by Reference	DOCUMENTS INCORPORATED BY REFERENCE Part III of this report incorporates by reference specific portions of the Registrant’s Notice of Annual Meeting and Proxy Statement relating to the Annual Meeting of Stockholders to be held on or about June 5, 2024.
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
Entity Central Index Key	0001788882
Class A Shares
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		9,600,000
Class B Shares
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		5,000,000

LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES - Schedule of Historical Claims (Details)	Dec. 31, 2023
Insurance [Abstract]
Incremental paid, year 1	53.80%
Incremental paid, year 2	31.30%
Incremental paid, year 3	8.80%
Incremental paid, year 4	3.70%
Incremental paid, year 5	0.00%
Incremental paid, year 6	0.30%
Incremental paid, year 7	0.00%

LEASES - Narrative (Details) $ in Millions	12 Months Ended
LEASES - Narrative (Details) $ in Millions	Dec. 31, 2022 USD ($)
Lessee, Lease, Description [Line Items]
(Decrease) increase in operating lease assets and liabilities	$ (0.9)
Corporate Headquarters
Lessee, Lease, Description [Line Items]
(Decrease) increase in operating lease assets and liabilities	1.4
General and administrative
Lessee, Lease, Description [Line Items]
Lease expense due to early termination	$ 0.9

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Supplemental Disclosures (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Accounting Policies [Abstract]
Interest paid	$ 42.5	$ 24.5	$ 23.9
Federal income taxes paid	0.0	0.0	0.0
Leasehold improvements - non-cash	0.0	0.9	1.5
Lease liabilities arising from obtaining right-of-use asset	0.0	0.0	9.9
Investment Agreement issuance costs - non-cash	$ 0.0	$ 0.0	$ 9.1

SHARE-BASED COMPENSATION - Narrative (Details) $ in Millions	12 Months Ended
	Dec. 31, 2023 USD ($) shares	Aug. 31, 2022 shares	Oct. 31, 2021 tranche shares
Warrants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost \| $	$ 3.8
Remaining cost to be recognized	1 year
Stock option expense
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Remaining cost to be recognized	3 years
Unrecognized compensation cost, options \| $	$ 1.0
Restricted stock unit expense
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost \| $	$ 21.0
Remaining cost to be recognized	4 years
Performance-based restricted stock unit expense
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost \| $	$ 1.9
Expected term	5 years
Risk free interest rate	4.06%
Expected dividend rate	0.00%
Expected volatility rate	76.00%
2020 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized (in shares)	3,800,000
Annual shares increase, percentage of outstanding stock	4.00%
Shares available for issuance (in shares)	1,200,000
2020 ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual shares increase, percentage of outstanding stock		1.00%
Short Term Warrant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of tranches \| tranche			3
Long Term Warrant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of tranches \| tranche			5
Carvana
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of tranches \| tranche			8
Class A Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued (in shares)			7,200,000
Class A Shares \| 2020 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum shares allowed to be issued (in shares)	6,700,000
Class A Shares \| 2020 ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized (in shares)		300,000
Shares outstanding, annual shares increase (in shares)		400,000
Class A Shares \| Short Term Warrant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued (in shares)	7,200,000
Class A Shares \| Long Term Warrant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued (in shares)	7,200,000

OTHER COMPREHENSIVE INCOME (LOSS) AND ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	$ 277.1	$ 536.4	$ 1,031.4
Other comprehensive income (loss)	3.3	(6.2)	(5.2)
Ending balance	165.7	277.1	536.4
Change in net unrealized gains on investment
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(5.8)	0.4	5.6
Other comprehensive income (loss) before reclassifications	3.3	(6.9)	(2.8)
Net realized losses (gains) on investments reclassified from AOCI to net loss	0.0	0.7	(2.4)
Other comprehensive income (loss)	3.3	(6.2)	(5.2)
Ending balance	$ (2.5)	$ (5.8)	$ 0.4

- Definition

Amount of equity (deficit) attributable to parent. Excludes temporary equity and equity attributable to noncontrolling interest.

+ References

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+ Details

REINSURANCE (Tables)

12 Months Ended

Dec. 31, 2023

Insurance [Abstract]

Schedule of Direct Premiums Written

The following table reflects amounts affecting the consolidated balance sheets and statements of operations and comprehensive loss for reinsurance as of and for the years ended December 31:


	2023		2022		2021
	(dollars in millions)
Loss and LAE reserves:
Direct	$	253.4	$	269.3	$	313.2
Assumed	30.8		18.1		7.0
Ceded	(43.8)		(76.4)		(79.5)
Net loss and LAE reserves	$	240.4	$	211.0	$	240.7
Unearned premiums:
Direct	$	235.4	$	125.8	$	170.6
Assumed	48.3		10.7		9.5
Ceded	(48.2)		(74.2)		(100.8)
Net unearned premiums	$	235.5	$	62.3	$	79.3
Premiums written:
Direct	$	674.6	$	556.8	$	725.9
Assumed	108.5		43.2		16.7
Ceded	(209.9)		(331.2)		(397.3)
Net premiums written	$	573.2	$	268.8	$	345.3
Premiums earned:
Direct	$	564.9	$	601.6	$	712.3
Assumed	70.9		42.0		7.3
Ceded	(235.9)		(357.7)		(409.3)
Net premiums earned	$	399.9	$	285.9	$	310.3
Losses and LAE incurred:
Direct	$	424.1	$	549.8	$	683.9
Assumed	51.7		44.9		10.9
Ceded	(144.5)		(243.7)		(302.5)
Net losses and LAE incurred	$	331.3	$	351.0	$	392.3

Gross premiums written by state is as follows for the years ended December 31, 2023, 2022 and 2021:


	For the Years Ended December 31,
	2023				2022				2021
	Amount		% of Total		Amount		% of Total		Amount		% of Total
	(dollars in millions)
State:
Texas	$	134.3	17.1	%	$	109.3	18.2	%	$	152.3	20.5	%
Georgia	94.3		12.0		62.3		10.4		79.2		10.7
Colorado	53.6		6.8		40.6		6.8		33.5		4.5
Pennsylvania	45.2		5.8		34.9		5.8		39.8		5.4
Arizona	35.4		4.5		17.1		2.9		23.5		3.2
South Carolina	34.4		4.4		20.1		3.4		26.3		3.5
Utah	30.8		3.9		30.9		5.2		33.8		4.6
Ohio	26.7		3.4		15.1		2.5		18.0		2.4
Oklahoma	23.6		3.0		19.8		3.3		22.5		3.0
Missouri	22.9		2.9		17.2		2.9		24.7		3.3
All others states	281.9		36.2		232.7		38.6		289.0		38.9
Total	$	783.1	100.0	%	$	600.0	100.0	%	$	742.6	100.0	%

STATUTORY FINANCIAL INFORMATION (Tables)

12 Months Ended

Dec. 31, 2023

Insurance [Abstract]

Schedule of Statutory Financial Information

Root Insurance Company and Root Property & Casualty’s statutory capital and surplus as of December 31, 2023 and 2022 and statutory net loss for the years ended December 31, 2023, 2022 and 2021 are as follows:


	Statutory Net Loss						Statutory Capital and Surplus
	2023		2022		2021		2023		2022
	(in millions)
Root Insurance Company	$	(44.4)	$	(125.7)	$	(126.9)	$	60.1	$	77.0
Root Property & Casualty	(12.2)		(30.8)		(33.4)		21.3		20.3
Total	$	(56.6)	$	(156.5)	$	(160.3)	$	81.4	$	97.3

- Definition

Tabular disclosure of how the entity's reporting under GAAP as of the balance sheet date differs from the results based on prescribed and permitted accounting practices of the state or country of domicile in which a relevant statutory filing is made, or differences in results based on the National Association of Insurance Commissioners (NAIC) prescribed practices, or a combination thereof. Describes the accounting practices used and the related monetary effect on statutory surplus, net income, and risk-based capital. If an insurance enterprise's risk-based capital would have triggered a regulatory event had it not used a permitted practice, that fact is disclosed in the financial statements. Permitted statutory accounting practices include practices not prescribed but allowed by the domiciliary state insurance department regulatory authority.

+ References + Details

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule ofInternally Developed Software (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Accounting Policies [Abstract]
Internally developed software	$ 38.5	$ 29.3
Accumulated amortization	(19.3)	(13.0)
Internally developed software, net	$ 19.2	$ 16.3

RESTRUCTURING COSTS (Tables)

12 Months Ended

Dec. 31, 2023

Restructuring and Related Activities [Abstract]

Schedule of Restructuring Costs Recorded In Consolidated Statements Of Operations And Comprehensive Loss

The following table displays restructuring costs recorded in general and administrative expenses on the consolidated statements of operations and comprehensive loss:


	For the Years Ended December 31,						Cumulative Incurred Through December 31, 2023
	2023		2022		2021
	(dollars in millions)
Restructuring costs:
Employee costs	$	7.7	$	15.5	$	—	$	23.2
Real estate exit costs	—		2.1		—		2.1
Other costs	3.5		1.0		—		4.5
Total restructuring costs	$	11.2	$	18.6	$	—	$	29.8

The following table displays a rollforward of the accrual for restructuring costs recorded in accounts payable and accrued expenses on the consolidated balance sheets:


	Employee costs		Other costs		Total liability
	(dollars in millions)
Restructuring liability as of December 31, 2021	$	—	$	—	$	—
Expense incurred	10.2		1.0		11.2

Payments	(7.1)		(0.9)		(8.0)
Restructuring liability as of December 31, 2022	$	3.1	$	0.1	$	3.2
Expense incurred	7.3		3.4		10.7

Payments	(2.1)		(3.5)		(5.6)
Restructuring liability as of December 31, 2023	$	8.3	$	—	$	8.3

INVESTMENTS - Amortized Cost and Fair Value (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 169.3	$ 134.6
Allowance for Expected Credit Losses	0.0	0.0
Gross Unrealized Gains	0.7	0.1
Gross Unrealized Losses	(3.2)	(5.9)
Fair Value	166.8	128.8
Total fixed maturities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	168.4	134.2
Allowance for Expected Credit Losses	0.0	0.0
Gross Unrealized Gains	0.7	0.1
Gross Unrealized Losses	(3.2)	(5.9)
Fair Value	165.9	128.4
U.S. Treasury securities and agencies
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	14.6	11.3
Allowance for Expected Credit Losses	0.0	0.0
Gross Unrealized Gains	0.1	0.0
Gross Unrealized Losses	(0.1)	(0.3)
Fair Value	14.6	11.0
Municipal securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	24.8	21.4
Allowance for Expected Credit Losses	0.0	0.0
Gross Unrealized Gains	0.1	0.0
Gross Unrealized Losses	(0.8)	(1.2)
Fair Value	24.1	20.2
Corporate debt securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	66.3	60.5
Allowance for Expected Credit Losses	0.0	0.0
Gross Unrealized Gains	0.2	0.0
Gross Unrealized Losses	(1.3)	(2.7)
Fair Value	65.2	57.8
Residential mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	12.0	5.5
Allowance for Expected Credit Losses	0.0	0.0
Gross Unrealized Gains	0.1	0.0
Gross Unrealized Losses	(0.2)	(0.3)
Fair Value	11.9	5.2
Commercial mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	30.4	24.4
Allowance for Expected Credit Losses	0.0	0.0
Gross Unrealized Gains	0.1	0.0
Gross Unrealized Losses	(0.7)	(1.2)
Fair Value	29.8	23.2
Other debt obligations
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	20.3	11.1
Allowance for Expected Credit Losses	0.0	0.0
Gross Unrealized Gains	0.1	0.1
Gross Unrealized Losses	(0.1)	(0.2)
Fair Value	20.3	11.0
Short-term investments
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	0.9	0.4
Allowance for Expected Credit Losses	0.0	0.0
Gross Unrealized Gains	0.0	0.0
Gross Unrealized Losses	0.0	0.0
Fair Value	$ 0.9	$ 0.4

LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Insurance [Abstract]
Incurred losses and LAE attributable to prior accident years	$ (7.0)	$ 2.9	$ (13.6)

RESTRUCTURING COSTS

12 Months Ended

Dec. 31, 2023

Restructuring and Related Activities [Abstract]

RESTRUCTURING COSTS

In 2022, we conducted strategic initiatives to reduce operating costs, improve efficiency, and increase focus on our strategic priorities. These initiatives resulted in restructuring actions that included a reduction in workforce levels, contract terminations, and in certain instances, a reduction in office space. These restructuring actions include the following costs:

Employee costs—consist of severance, benefits, share-based compensation, and employee compensation expense dependent upon continuous employment for certain employees and related employee costs.

Real estate exit costs—consist of real estate exit costs primarily related to accelerated amortization of right-of-use assets, leasehold improvements and furniture and fixtures.

Other costs—primarily consist of contract termination costs incurred as part of our efforts to improve efficiency and reduce operating costs and accelerated expense for software that no longer has economic benefit.

As of December 31, 2023 we do not expect to incur any additional material expenditures in future periods related to restructuring actions that have occurred.

The following table displays restructuring costs recorded in general and administrative expenses on the consolidated statements of operations and comprehensive loss:


	For the Years Ended December 31,						Cumulative Incurred Through December 31, 2023
	2023		2022		2021
	(dollars in millions)
Restructuring costs:
Employee costs	$	7.7	$	15.5	$	—	$	23.2
Real estate exit costs	—		2.1		—		2.1
Other costs	3.5		1.0		—		4.5
Total restructuring costs	$	11.2	$	18.6	$	—	$	29.8

The following table displays a rollforward of the accrual for restructuring costs recorded in accounts payable and accrued expenses on the consolidated balance sheets:


	Employee costs		Other costs		Total liability
	(dollars in millions)
Restructuring liability as of December 31, 2021	$	—	$	—	$	—
Expense incurred	10.2		1.0		11.2

Payments	(7.1)		(0.9)		(8.0)
Restructuring liability as of December 31, 2022	$	3.1	$	0.1	$	3.2
Expense incurred	7.3		3.4		10.7

Payments	(2.1)		(3.5)		(5.6)
Restructuring liability as of December 31, 2023	$	8.3	$	—	$	8.3

LONG-TERM DEBT (Tables)

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Schedule of Long Term Debt

The following summarizes the carrying value of long-term debt and warrants as of December 31, 2023 and 2022:


	2023		2022
	(dollars in millions)
Term Loan	$	300.0	$	300.0





Accrued interest payable	7.9		7.3
Unamortized discount and debt issuance costs and warrants	(8.9)		(11.9)
Total	$	299.0	$	295.4

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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+ Details

FAIR VALUE OF FINANCIAL INSTRUMENTS - Schedule of Fair Value of Assets and Liabilities (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Assets
AFS securities	$ 166.8	$ 128.8
Cash equivalents	439.6	487.3
Total assets at fair value	606.4	616.1
U.S. Treasury securities and agencies
Assets
AFS securities	14.6	11.0
Municipal securities
Assets
AFS securities	24.1	20.2
Corporate debt securities
Assets
AFS securities	65.2	57.8
Residential mortgage-backed securities
Assets
AFS securities	11.9	5.2
Commercial mortgage-backed securities
Assets
AFS securities	29.8	23.2
Other debt obligations
Assets
AFS securities	20.3	11.0
Total fixed maturities
Assets
AFS securities	165.9	128.4
Short-term investments
Assets
AFS securities	0.9	0.4
Level 1
Assets
Cash equivalents	439.6	487.3
Total assets at fair value	453.8	496.5
Level 1 \| U.S. Treasury securities and agencies
Assets
AFS securities	13.3	9.2
Level 1 \| Municipal securities
Assets
AFS securities	0.0	0.0
Level 1 \| Corporate debt securities
Assets
AFS securities	0.0	0.0
Level 1 \| Residential mortgage-backed securities
Assets
AFS securities	0.0	0.0
Level 1 \| Commercial mortgage-backed securities
Assets
AFS securities	0.0	0.0
Level 1 \| Other debt obligations
Assets
AFS securities	0.0	0.0
Level 1 \| Total fixed maturities
Assets
AFS securities	13.3	9.2
Level 1 \| Short-term investments
Assets
AFS securities	0.9	0.0
Level 2
Assets
Cash equivalents	0.0	0.0
Total assets at fair value	152.6	119.6
Level 2 \| U.S. Treasury securities and agencies
Assets
AFS securities	1.3	1.8
Level 2 \| Municipal securities
Assets
AFS securities	24.1	20.2
Level 2 \| Corporate debt securities
Assets
AFS securities	65.2	57.8
Level 2 \| Residential mortgage-backed securities
Assets
AFS securities	11.9	5.2
Level 2 \| Commercial mortgage-backed securities
Assets
AFS securities	29.8	23.2
Level 2 \| Other debt obligations
Assets
AFS securities	20.3	11.0
Level 2 \| Total fixed maturities
Assets
AFS securities	152.6	119.2
Level 2 \| Short-term investments
Assets
AFS securities	0.0	0.4
Level 3
Assets
Cash equivalents	0.0	0.0
Total assets at fair value	0.0	0.0
Level 3 \| U.S. Treasury securities and agencies
Assets
AFS securities	0.0	0.0
Level 3 \| Municipal securities
Assets
AFS securities	0.0	0.0
Level 3 \| Corporate debt securities
Assets
AFS securities	0.0	0.0
Level 3 \| Residential mortgage-backed securities
Assets
AFS securities	0.0	0.0
Level 3 \| Commercial mortgage-backed securities
Assets
AFS securities	0.0	0.0
Level 3 \| Other debt obligations
Assets
AFS securities	0.0	0.0
Level 3 \| Total fixed maturities
Assets
AFS securities	0.0	0.0
Level 3 \| Short-term investments
Assets
AFS securities	$ 0.0	$ 0.0

SHARE-BASED COMPENSATION- Schedule of Warrants (Details) - $ / shares shares in Millions	12 Months Ended
	Dec. 31, 2023	Jan. 31, 2022	Oct. 31, 2021
Class A Shares
Class of Warrant or Right [Line Items]
Exercise price of warrants (in dollars per share)		$ 162.00
Shares issued (in shares)			7.2
Short Term Warrant \| Class A Shares
Class of Warrant or Right [Line Items]
Shares issued (in shares)	7.2
Short Term Warrant \| Completing the Integrated Platform
Class of Warrant or Right [Line Items]
Exercise price of warrants (in dollars per share)	$ 180.00
Short Term Warrant \| Completing the Integrated Platform \| Class A Shares
Class of Warrant or Right [Line Items]
Shares issued (in shares)	2.4
Grant date fair value per share (in dollars per share)	$ 0.42
Short Term Warrant \| 50,000 policy originations
Class of Warrant or Right [Line Items]
Exercise price of warrants (in dollars per share)	$ 198.00
Short Term Warrant \| 50,000 policy originations \| Class A Shares
Class of Warrant or Right [Line Items]
Shares issued (in shares)	3.2
Grant date fair value per share (in dollars per share)	$ 0.37
Short Term Warrant \| 75,000 policy originations
Class of Warrant or Right [Line Items]
Exercise price of warrants (in dollars per share)	$ 216.00
Short Term Warrant \| 75,000 policy originations \| Class A Shares
Class of Warrant or Right [Line Items]
Shares issued (in shares)	1.6
Grant date fair value per share (in dollars per share)	$ 0.18
Long Term Warrant \| Class A Shares
Class of Warrant or Right [Line Items]
Shares issued (in shares)	7.2
Long Term Warrant \| 100,000 policy originations
Class of Warrant or Right [Line Items]
Exercise price of warrants (in dollars per share)	$ 180.00
Long Term Warrant \| 100,000 policy originations \| Class A Shares
Class of Warrant or Right [Line Items]
Shares issued (in shares)	1.4
Grant date fair value per share (in dollars per share)	$ 0.42
Long Term Warrant \| 200,000 policy originations
Class of Warrant or Right [Line Items]
Exercise price of warrants (in dollars per share)	$ 225.00
Long Term Warrant \| 200,000 policy originations \| Class A Shares
Class of Warrant or Right [Line Items]
Shares issued (in shares)	1.5
Grant date fair value per share (in dollars per share)	$ 0.35
Long Term Warrant \| 300,000 policy originations
Class of Warrant or Right [Line Items]
Exercise price of warrants (in dollars per share)	$ 270.00
Long Term Warrant \| 300,000 policy originations \| Class A Shares
Class of Warrant or Right [Line Items]
Shares issued (in shares)	1.5
Grant date fair value per share (in dollars per share)	$ 0.24
Long Term Warrant \| 400,000 policy originations
Class of Warrant or Right [Line Items]
Exercise price of warrants (in dollars per share)	$ 405.00
Long Term Warrant \| 400,000 policy originations \| Class A Shares
Class of Warrant or Right [Line Items]
Shares issued (in shares)	1.5
Grant date fair value per share (in dollars per share)	$ 0.09
Long Term Warrant \| 500,000 policy originations
Class of Warrant or Right [Line Items]
Exercise price of warrants (in dollars per share)	$ 540.00
Long Term Warrant \| 500,000 policy originations \| Class A Shares
Class of Warrant or Right [Line Items]
Shares issued (in shares)	1.3
Grant date fair value per share (in dollars per share)	$ 0.04

LONG-TERM DEBT

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

LONG-TERM DEBT

In January 2022, we entered into the Term Loan, with the full principal amount due and payable upon maturity on January 27, 2027. Interest is payable quarterly and is determined on a floating interest rate currently calculated on the Secured Overnight Financing Rate, or SOFR, with a 1.0% floor, plus 9.0%. As part of the loan agreement, we issued warrants to the lender to purchase approximately 0.3 million shares of our Class A common stock at a strike price of $162.00 per share. Such warrants will expire on the later of the repayment in full of the Term Loan or January 27, 2027. The total fair value of these warrants at January 27, 2022 was $0.6 million.

The Term Loan contains debt covenants which, among other things, require cash and cash equivalents held in entities other than our insurance subsidiaries to be at least $200.0 million at all times. This threshold may be reduced to $150.0 million under two sets of circumstances: issuing 62,500 insurance policies through our Carvana embedded product and achieving a ratio of direct contribution to gross premiums earned of 12%; or ceasing any customer acquisition spend outside of the Carvana commercial agreement and reducing our monthly cash burn to no greater than $12.0 million.

Under the latter set of circumstances, we must issue additional warrants to purchase shares of our Class A common stock equal to 1.0% of the aggregate number of issued and outstanding shares of Class A common stock on a fully-diluted basis as of the date the threshold is reduced. The additional warrants, if issued, would have an exercise price equal to the 30-trading day volume weighted average price of the Class A common stock as of the trading day immediately prior to the triggering date. The additional warrants will expire on the later of the repayment in full of the Term Loan, January 27, 2027 or the date that falls 12 months after the issuance of these warrants. As of December 31, 2023, the fair value of these 1.0% warrants was immaterial to our consolidated financial statements.

The following summarizes the carrying value of long-term debt and warrants as of December 31, 2023 and 2022:


	2023		2022
	(dollars in millions)
Term Loan	$	300.0	$	300.0





Accrued interest payable	7.9		7.3
Unamortized discount and debt issuance costs and warrants	(8.9)		(11.9)
Total	$	299.0	$	295.4

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

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+ Details

INCOME TAXES - Schedule of Effective Income Tax Reconciliation (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Loss before income taxes	$ (147.4)	$ (297.7)	$ (521.1)
Amount
Statutory U.S. federal income tax benefit	(30.9)	(62.5)	(109.4)
Valuation allowance on deferred tax assets	34.9	65.8	116.7
Share-based compensation	5.5	4.9	(3.3)
Nondeductible compensation	1.2	1.3	1.8
Return to provision permanent adjustments	0.0	(3.5)	(0.5)
State net operating loss	(10.5)	(7.1)	(4.9)
Other	(0.2)	1.1	(0.4)
Total income tax expense (benefit)	$ 0.0	$ 0.0	$ 0.0
Percent
Statutory U.S. federal income tax benefit	21.00%	21.00%	21.00%
Valuation allowance on deferred tax assets	(23.70%)	(22.10%)	(22.40%)
Share-based compensation	(3.70%)	(1.60%)	0.60%
Nondeductible compensation	(0.80%)	(0.40%)	(0.30%)
Return to provision permanent adjustments	0.00%	1.20%	0.10%
State net operating loss	7.10%	2.40%	0.90%
Other	0.10%	(0.50%)	0.10%
Income tax expense (benefit)	0.00%	0.00%	0.00%

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Dec. 31, 2023
Accounting Policies [Abstract]
Basis of Presentation	The consolidated financial statements include the accounts of Root, Inc. and its subsidiaries, all of which are wholly owned.
Consolidation	These financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. All intercompany accounts and transactions have been eliminated.
Use of Estimates	Use of Estimates—The preparation of consolidated financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates reflected in our consolidated financial statements include, but are not limited to, reserves for loss and loss adjustment expense, or LAE, valuation allowance for income taxes and allowance for expected credit losses on premium receivables and reinsurance recoverables.
Legal Contingencies	Legal Contingencies—From time to time, we are party to litigation and legal proceedings relating to our business operations. We consider legal actions relating to claims made in the ordinary course of seeking indemnification for a loss covered by the insurance policy in establishing loss and LAE reserves. In the ordinary course of business we also face certain lawsuits that seek damages beyond policy limits, or extra-contractual claims. We continually evaluate potential liabilities and reserves for litigation using the guidance issued in Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 450, Contingencies. Under this guidance, we may only record reserves for a loss if as of the date the financial statements are issued or available to be issued, the likelihood of occurrence is deemed probable and we can reasonably estimate the amount of the loss. When disclosing litigation or claims where a material loss is judged to be reasonably possible, we will disclose an estimated range of loss or state that an estimate cannot be made. We consider each legal action using this guidance and record reserves for losses as warranted by establishing a reserve in loss and loss adjustment expense reserves for extra-contractual claims and other liabilities for class action and other non-claims related lawsuits in our consolidated balance sheets. Any non-reinsurance related recoveries are recognized as other assets in our consolidated balance sheets. We record amounts within loss and loss adjustment expenses for extra-contractual claims and general and administrative for class action and other non-claims related lawsuits in our consolidated statements of operations and comprehensive loss. Further details are discussed in Note 13, “Commitments and Contingencies.”
Debt and Equity Issuance Costs	Debt and Equity Issuance Costs—Debt and equity issuance costs, which primarily consist of advisor, legal, accounting, and other third-party fees directly related to issuing debt and equity instruments, are capitalized as other assets in our consolidated balance sheets as incurred. We incurred such costs in connection with the investment agreement with Carvana Group, LLC, or Investment Agreement, that we entered into on August 21, 2021 and our $300.0 million five-year term loan, or Term Loan, that we entered into on January 26, 2022. Upon close of the related transaction, these deferred issuance costs are generally offset against the related proceeds. Debt issuance costs are subsequently amortized over the term of the financing agreement as interest expense on the consolidated statements of operations and comprehensive loss.
Indefinite-Lived Intangible Assets	Indefinite-Lived Intangible Assets—We had insurance licenses of $8.9 million, including transaction costs, as of December 31, 2023 and 2022 in other assets on the consolidated balance sheets. We incur a minimal fee to renew each license. These intangible assets are not amortized, but instead are tested for impairment annually or when indicators of impairment exist. The impairment test for indefinite-lived intangibles involves first assessing qualitative factors to determine if it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount. If so, then a quantitative test is performed to compare the estimated fair value of the indefinite-lived intangible asset to the respective asset's carrying amount. The evaluation requires the use of estimates and significant judgments and considers the weight of evidence and significance of all identified events and circumstances and most relevant drivers of fair value, both positive and negative, in determining whether it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount. We had $1.3 million, including transaction costs, as of December 31, 2023 and 2022 related to the purchase of the Root.com domain in March 2022, in other assets on the consolidated balance sheets. No impairment was recognized for 2023, 2022 or 2021 related to indefinite-lived intangible assets.
Segment Information	Segment Information—Our chief operating decision maker is the Chief Executive Officer. The chief operating decision maker manages operations, allocates resources, and evaluates financial performance on a company-wide basis. We operate in one reporting segment providing insurance products to customers.
Cash, Cash Equivalents and Restricted Cash	Cash, Cash Equivalents and Restricted Cash—Cash consists of cash on deposit. Cash equivalents are short-term, highly liquid investments that typically mature within three months from the date of origination or purchase and are principally stated at amortized cost, which approximates their fair value. Restricted cash consists of amounts held by a financial institution to satisfy letter of credit requirements for certain property leases. If checks are issued in excess of cash balances in individual bank accounts, a book overdraft shall be reclassified to accounts payable on the consolidated balance sheets. When a check is issued whereby a disbursement account is used to write the check, but the account is not funded until the check is presented for payment this “negative cash” balance is included in cash and cash equivalents on the consolidated balance sheets, if the funding account has sufficient funds.
Investments	Investments—Investments in debt securities are classified as short-term and available-for-sale fixed maturity securities and are carried at fair value with any unrealized gains and losses, net of taxes, recorded as a component of accumulated other comprehensive income. Management regularly reviews our securities for signs of impairment, an assessment requiring significant management judgment. The criteria that management considers are the financial condition of the issuer, including receipt of scheduled principal and interest cash flows, fair value of a security that has fallen below the amortized value, maturity dates, current economic conditions and intent to sell, including if it is more likely than not that we will be required to sell the security before recovery. We then assess whether the decline in value is due to non-credit related or credit related factors. Non-credit related declines in fair value are recorded as unrealized losses in accumulated other comprehensive income. If we determine that the decline is credit related, we establish an allowance for credit losses equal to the difference between the discounted cash flow model and the amortized value, which is recorded in net realized gains on investments in our consolidated statements of operations and comprehensive loss. This allowance may be subsequently adjusted for recoveries or further credit losses. No such credit losses were recognized in 2023, 2022 and 2021. Other investments primarily consist of private equity investments without a readily determinable fair value. We elected to account for these investments at cost minus any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or a similar investment of the same issuer. Such changes are accounted for within net investment income in our consolidated statements of operations and comprehensive loss. We also invest in Low Income Housing Tax Credits, or LIHTC, projects by way of investing in a limited liability entity to offset Georgia premium taxes. The purpose of these investments is to encourage private capital investments into regions within Georgia that are in need of economic development, while providing tax credits and operating loss tax benefits to investors. We account for this investment using the cost method because our interest in the limited liability entity is minor and we have virtually no influence over the entity’s operating and financial policies. When we utilize the tax credits, the associated investment becomes impaired. Impairment of the investment is recognized within net investment income in our consolidated statements of operations and comprehensive loss.
Fair Value Measurements	Fair Value Measurements—Fair value is defined as the price that would be received upon selling an asset or the price paid to transfer a liability on the measurement date in the principal or most advantageous market for the asset or liability in an orderly transaction between willing market participants. A three-tier hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair values are: Level 1 - Financial assets and liabilities for which inputs are observable and are obtained from reliable quoted prices in active markets for identical assets and liabilities. Level 2 - Financial assets and liabilities for which values are based on quoted prices in markets that are not active or for which values are based on similar assets and liabilities that are actively traded. This also includes pricing models for which the inputs are corroborated by market data. Level 3 - Financial assets and liabilities for which values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.
Leases	Leases—We record leases in accordance with ASC Topic 842, Leases. We recognized a right-of-use asset and liability on the consolidated balance sheets for all leases, except for leases covering a period of fewer than 12 months. Operating lease expense for operating lease right-of-use assets is recognized on a straight-line basis over the lease term, which may include options to extend or terminate the lease when it is reasonably certain to do so and there is a significant economic incentive to exercise that option. For additional information refer to Note 8, “Leases.”
Premiums Earned	Premiums, Premiums Receivable and Premium Write-offs—Premiums written are deferred and earned pro rata over the policy period. Unearned premium is established to cover the unexpired portion of premiums written. A premium deficiency, as measured on a gross basis, is recorded when the sum of expected losses, LAE, unamortized acquisition costs and maintenance costs exceed the recorded unearned premium reserve and anticipated investment income. A premium deficiency reserve is recognized as a reduction of deferred policy acquisition costs and, if necessary, by accruing an additional liability for the deficiency, with a corresponding charge to operations. We did not record a premium deficiency reserve in 2023, 2022 or 2021. We have a fronting arrangement with an unaffiliated Texas county mutual insurance company, or the fronting carrier. We route all of our new auto policies in Texas through the fronting carrier whereby we assume 100% of the related premium and losses on those policies. The fronting arrangement allows us to have greater rating and underwriting flexibility. Premiums assumed are deferred and earned pro rata over the policy period. Unearned premium is established to cover the unexpired portion of premiums assumed. Unaffiliated premiums payable are amounts owed to the fronting carrier for premiums assumed and are recorded in other liabilities on the consolidated balance sheets. Unaffiliated premiums payable was $60.5 million and $14.2 million as of December 31, 2023 and 2022, respectively. Unaffiliated reinsurance premiums receivable are the amounts owed to us from the fronting carrier for reinsurance premiums and are recorded in reinsurance recoverable and receivable on the consolidated balance sheets. Unaffiliated reinsurance premiums receivable was $59.2 million and $14.1 million as of December 31, 2023 and 2022, respectively.
Premiums Receivable	Premiums receivable represents premiums written but not yet collected. Generally, premiums are collected prior to providing risk coverage, minimizing our exposure to credit risk. Due to a variety of factors, certain premiums billed may not be collected, for which we establish an allowance for expected credit losses based primarily on an analysis of historical collection experience, adjusted for current economic conditions.
Premium Write-offs	A policy is considered past due on the first day after its due date and policies greater than 90 days past due are written-off.
Fee and Other Income	Fee Income—Fee income consists primarily of the flat fee we charge for installment payments which relates to the additional administrative costs associated with processing more frequent billings. These fees are recognized in the period in which we process the installment. We also charge policy fees which are typically nonrefundable fees that are intended to reimburse a portion of the costs incurred to underwrite the policy. These fees are recognized ratably over the policy coverage period. Fee income also includes late payment fees that are collected from our policyholders. These fees are recognized in the period in which we process the late payment. Other Income—Other income is comprised of revenue earned from distributing website and app policy inquiry leads in geographies where we do not have a presence, recognized when we generate the lead; and commissions earned for homeowners policies placed with third-party insurance companies where we have no exposure to the insured risk, recognized on the effective date of the associated policy.
Sales and Marketing	Sales and Marketing—Sales and marketing includes expenses related to direct performance marketing, channel media, advertising, sponsorship, referral fees and partnership channel. These expenses also include related salaries, health benefits, bonuses, employee retirement plan-related expenses and employee share-based compensation expense, or Personnel Costs, and overhead allocated based on headcount, or Overhead, related to our brand strategy, creative and business development activities and certain warrant compensation expense related to our embedded channel. We incur sales and marketing expenses for all product offerings. Sales and marketing costs are expensed as incurred. Certain warrant compensation expense is recognized on a pro-rata basis considering progress toward completing the integrated automobile insurance solution for Carvana Group, LLC’s, or Carvana’s, online car buying platform, or Integrated Platform, under the Carvana commercial agreement. General and Administrative—General and administrative expenses primarily relate to external professional service expenses; Personnel Costs and Overhead for corporate functions; and depreciation expense for computers, furniture and other fixed assets; write-offs; and restructuring costs which include employee costs, real estate exit costs and other costs. General and administrative expenses are expensed as incurred.
Other Insurance Expense (Benefit)	Other Insurance Expense (Benefit)—Other insurance expense (benefit) includes underwriting expenses, commission expenses related to our partnership channel, premium taxes, credit card and policy processing expenses, premium write-offs, insurance license expenses, certain warrant compensation expense related to our embedded channel, and Personnel Costs and Overhead related to actuarial and certain data science activities. We amortize a portion of our deferred policy acquisition costs including certain commissions related to our partnership channel, premium taxes and report costs related to the successful acquisition of a policy. Other insurance expense (benefit) is expensed as incurred, except for costs related to deferred policy acquisition costs that are capitalized and subsequently amortized over the same period in which the related premiums are earned. Certain warrant compensation expense is recognized on a pro-rata basis for policies originated from the Integrated Platform towards milestones as defined under the Carvana commercial agreement. These expenses are also recognized net of ceding commissions earned from our quota share reinsurance agreements. The ceding commission provides for reimbursement of both direct and other periodic acquisition costs, including certain underwriting and marketing costs, and is presented as a reduction of other insurance expense (benefit).
Technology and development	Technology and development—Technology and development expense consists of software development costs related to our mobile app and homegrown information technology systems; third-party services related to infrastructure support; Personnel Costs and Overhead for engineering, product, technology, and certain data science activities; and amortization of internally developed software. Technology and development is expensed as incurred, except for development and testing costs related to internally developed software that are capitalized and subsequently amortized over the expected useful life.
General and Administrative	Sales and Marketing—Sales and marketing includes expenses related to direct performance marketing, channel media, advertising, sponsorship, referral fees and partnership channel. These expenses also include related salaries, health benefits, bonuses, employee retirement plan-related expenses and employee share-based compensation expense, or Personnel Costs, and overhead allocated based on headcount, or Overhead, related to our brand strategy, creative and business development activities and certain warrant compensation expense related to our embedded channel. We incur sales and marketing expenses for all product offerings. Sales and marketing costs are expensed as incurred. Certain warrant compensation expense is recognized on a pro-rata basis considering progress toward completing the integrated automobile insurance solution for Carvana Group, LLC’s, or Carvana’s, online car buying platform, or Integrated Platform, under the Carvana commercial agreement. General and Administrative—General and administrative expenses primarily relate to external professional service expenses; Personnel Costs and Overhead for corporate functions; and depreciation expense for computers, furniture and other fixed assets; write-offs; and restructuring costs which include employee costs, real estate exit costs and other costs. General and administrative expenses are expensed as incurred.
Deferred Policy Acquisition Costs	Deferred Policy Acquisition Costs—Acquisition costs consist primarily of premium taxes, certain marketing costs and underwriting expenses, and commission expenses related to our partnership channel, net of ceding commissions, related to the successful acquisition of new or renewal business. They are deferred and amortized over the same period in which the related premiums are earned. Ceding commissions relating to reinsurance agreements are recorded as a reimbursement for both deferrable and non-deferrable acquisition costs. The portion of the ceding commission that is equal to the pro rata share of acquisition costs based on quota share percentage is recorded as an offset to the gross deferred policy acquisition costs. Any portion of the ceding commission that exceeds the acquisition costs of the business ceded is recorded as excess ceding commission, a deferred liability, and amortized over the same period in which the related premiums are earned.
Loss and Loss Adjustment Expense and Reserves	Loss and Loss Adjustment Expense and Reserves—Loss and LAE include the costs incurred for claims, payments made and estimated future payments to be made to or on behalf of our policyholders, including expenses needed to adjust or settle claims, net of amounts ceded to reinsurers. Loss and LAE reserves include an amount determined using adjuster determined case-base estimates for reported claims and actuarial determined unpaid claim estimates using past experience and historical emergence patterns for unreported losses and LAE. These reserves are a liability established to cover the estimated ultimate cost to settle insured losses. The estimation of the liability for loss and LAE reserves is complex and includes subjective considerations and management’s judgement. The actuarial methods to determine unpaid loss estimates consider loss trends, contract interpretation, mix of business, regulatory environment, economic conditions, inflation and other risk factors impacting claims settlement. The method used to estimate unpaid LAE liability is based on claims transaction data, including the relative cost of adjusting and settling a range of claim types from express material damage claims to more complex injury cases. There is considerable uncertainty associated with the actuarial estimates, and therefore no assurance can be made that the ultimate unpaid claim liability will not vary materially from such estimates. These loss estimates are continually reviewed by management and adjusted as necessary, with adjustments included in the period determined and recorded in loss and LAE in our consolidated statements of operations and comprehensive loss. As such, loss and LAE reserves represent management’s best estimate of the ultimate liability related to reported and unreported claims. Our loss and LAE reserves are recorded gross of reinsurance and net of amounts expected to be received from salvage (the amount recovered from a total loss claims expense) and subrogation (the right to recover payments from third parties). Loss and LAE are recorded net of amounts ceded to reinsurers. We enter into reinsurance contracts to limit our exposure to potential losses as well as to provide additional capacity to write more business. Loss and LAE are a function of the size and term of the insurance policies we write and the loss experience associated with the underlying risks. This includes an allowance for credit losses based on the probability of default and expected loss given default of a reinsurer. Loss and LAE may be paid out over a period of years. Various other expenses incurred during claims processing are allocated to LAE. These amounts include claims Personnel Costs, vendor expenses, software expense, internally developed software amortization, and Overhead.
Reinsurance	Reinsurance—In the ordinary course of business, we cede and retrocede a portion of our business written and assumed, respectively, to reinsurers to limit the maximum net loss potential arising from large risks and catastrophes. These arrangements, known as treaties, provide for reinsurance coverage on quota-share and excess-of-loss basis. All reinsurance contracts provide for indemnification against loss or liability relating to insurance risk and have been accounted for as reinsurance. Although the ceding of reinsurance does not discharge us from our primary liability to the policyholder, the insurance company that assumes the coverage assumes the related liability. Over time, our strategy continues to evolve and we may choose to amend, commute, and/or non-renew certain third-party reinsurance agreements, which may result in us retaining more of our business in the future. Amounts recoverable from and payable to reinsurers are estimated in a manner consistent with the claim liability associated with the reinsured business. Reinsurance premiums, commissions and expense reimbursements related to reinsured business are accounted for on a basis consistent with the basis used in accounting for the original policies issued and the terms of the reinsurance contracts. Premiums ceded to other companies have been reported as a reduction of premiums earned and are recognized over the remaining policy period based on the reinsurance protection provided. Amounts applicable to reinsurance ceded for unearned premium reserves are reported as a prepaid reinsurance premiums asset in the accompanying consolidated balance sheets and as reduction of unearned premiums in Note 6, “Reinsurance.” Ceding commissions received in connection with reinsurance ceded have been accounted for as a reduction of other insurance expense (benefit) in the consolidated statements of operations and comprehensive loss. Some of our reinsurance agreements provide for adjustment of amount of coverage based on loss experience. We recognize the asset or liability arising from these adjustable features in the period the adjustment occurs, which is calculated based on experience to date under the agreement. In the event that all or any of the reinsuring companies might be unable to meet their obligations under existing reinsurance agreements, we would be liable for such defaulted amounts. We evaluate and monitor the financial condition associated with our reinsurers in order to minimize our exposure to significant losses from reinsurer insolvencies. We obtain our reinsurance from a diverse group of reinsurers and monitor concentration as well as financial strength ratings of the reinsurers to minimize counterparty credit risk. To recognize this risk of credit loss, we have established an allowance for credit losses based on the probability of default and the expected loss given default as influenced by factors such as the reinsurer’s credit rating and average life of our reinsurance recoverables. Allowance for credit losses was $1.8 million and $0.2 million as of December 31, 2023 and 2022, respectively.
Income Taxes	Income Taxes—For the 2023 tax year, we will file a consolidated federal income tax return with Caret Holdings, Inc., Root Insurance Company, Root Property & Casualty, Root Lone Star Insurance Agency, Inc. and Root Reinsurance Company, Ltd. The consolidated return also includes Root Insurance Agency, LLC, Root Enterprise, LLC and Root Scout, LLC, which are disregarded entities under Caret Holdings, Inc. for federal income tax purposes. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are recognized as allowed under ASC 740, Income Taxes. We establish a valuation allowance when there is more likely than not insufficient evidence to support the recoverability of the deferred tax asset under ASC 740. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and results of recent operations. If it is determined that the deferred tax assets would be realizable in the future in excess of their net recorded amount, an adjustment would be made to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. A valuation allowance of $356.4 million and $322.3 million was established as of December 31, 2023 and 2022, respectively. Further details are discussed in Note 9, “Income Taxes.” We recognize the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained under examination by the appropriate taxing authority. Interest and penalties on our reserve for uncertain tax positions are recognized as a component of tax expense. As of December 31, 2023 and 2022, we did not have any unrecognized tax benefits for uncertain tax positions and had no accrued interest or penalties related to uncertain tax positions. The Inflation Reduction Act, or IRA, of 2022 was enacted on August 16, 2022. The IRA introduces a new corporate alternative minimum tax, or CAMT, which generally imposes a 15% minimum tax on the adjusted financial statement income, or AFSI, of large corporations whose three year average annual AFSI exceeds $1.0 billion, or applicable corporations, applies for tax years beginning after December 31, 2022. For the year ended December 31, 2023, we nor our subsidiaries had a three year average annual AFSI exceeding $1.0 billion. As such, we are not an applicable corporation nor subject to CAMT as of December 31, 2023.
Internally Developed Software	Internally Developed Software—We review our software development activity and capitalize costs during the application development phase under ASC 350-40, Internal-Use Software. These costs are amortized on a straight-line basis over a five-year period. Internally developed software costs are assessed for impairment at least quarterly, which also ensures that the assets are still in service. If there are assets identified as no longer in use, the remaining unamortized costs will be fully amortized.
Fixed Assets	Fixed Assets—Fixed Assets are carried at cost, net of accumulated depreciation. We capitalize purchases of certain fixed assets, including computers, furniture, and leasehold improvements. Depreciation on computers and furniture is recognized on a straight-line basis over a useful life of three years and five years, respectively. Depreciation on leasehold improvements is recognized on a straight-line basis over the shorter of their useful life or the life of the lease. When certain events or changes in operating conditions occur, an impairment assessment may be performed on the recoverability of the carrying amounts.
Employee Share-Based Compensation	Employee Share-Based Compensation—We award share-based compensation, including stock options, restricted stock units, or RSUs, performance-based restricted stock units, or PSUs, and restricted stock, to our officers, directors, employees, and certain advisors through approval from the Compensation Committee of the board of directors. Share-based compensation expense is recognized based on the grant date fair value of the awards, which is determined using the Black-Scholes Merton, or BSM, option-pricing model. The BSM option pricing model requires inputs based on certain subjective assumptions, including the expected stock price volatility, the expected term of the options, the risk-free interest rate for a period that approximates the expected term of the option, and our expected dividend yield. The fair value of common stock underlying the stock options, restricted stock and RSUs granted before our initial public offering, or IPO, had historically been determined by our board of directors, with input from management, and considering third-party valuations of our common stock. Because there had been no public market for our common stock, our board of directors had determined its fair value at the time of grant of the pre-IPO option by considering a number of objective and subjective factors, including financing investment rounds, operating and financial performance, the lack of liquidity of share capital and general and industry specific economic outlook, among other factors. Our board of directors determined the fair value of common stock based on valuations performed using the Option Pricing Method and the Probability Weighted Expected Return Method subject to relevant facts and circumstances. In connection with our IPO, our common stock became listed on the Nasdaq Global Select Market and we use these market prices for the fair value of our common shares. Stock options are generally exercisable for a period up to ten years from the grant date. We recognize forfeitures as they occur, which generally results in the reversal of previously recognized expense for nonvested awards. In the event of an involuntary termination that results in the cancellation of an award, the remaining unrecognized compensation cost for the entire award is recognized in the period of cancellation. If the award is cancelled and concurrently replaced upon termination, it follows modification accounting, typically as a Type III improbable-to-probable modification whereby it is effectively treated as a forfeiture and new grant as of the date of termination. Stock options generally vest over four years — 25% cliff vests after one year and approximately 2% vests each month over three years thereafter. RSUs generally vest over two or four years. For our awards vesting over two years, 50% cliff vests after one year and the remainder vest in equal quarterly installments over the following year. For our awards vesting over four years, 25% cliff vests after one year and the remainder vest in equal quarterly installments over three years thereafter. Certain other RSUs vest in accordance with one of the following patterns: over four years, 25% cliff vests after one year and approximately 2% vests each month over three years thereafter, or fully vest after one year. We generally recognize share-based compensation expense ratably over the respective vesting period. PSUs are expected to vest over a derived service period of one to four-years and are dependent upon the fulfillment of both a service condition and the achievement of stock-price goals during the performance period, with the latter being classified as a market condition according to ASC 718, Stock Compensation. The service condition with respect to the four tranches of PSUs will be met in installments on April 1, 2024, and each of the subsequent three anniversaries of that date, or Vesting Date Requirement, subject to the individual’s continued service through such dates. Stock price goals must be met on or after the respective tranche’s Vesting Date Requirement and are based on the average closing price per share of our Class A common stock over a consecutive 45 day trading period. Any tranche of PSUs with respect to which the stock price goal has not been met as of April 1, 2028 (the final day of the performance period) will be forfeited as of such date. The PSU compensation expense is recognized based on the grant date fair value of the award, which was determined by simulating Root’s stock prices using a Monte Carlo simulation in a risk-neutral framework, assuming a Geometric Brownian Motion. The simulation is repeated 100,000 times, and the average of the discounted values for each tranche is the grant date fair value for that tranche. The median time to vest is the derived service period. Employing a Monte Carlo simulation requires a range of inputs for each uncertain variable, and establishing linkage between the assumptions, if necessary. Inputs and assumptions used in our analysis included our stock price at grant date, exercise prices, the term of the PSUs, equity volatility, risk-free rate and dividend yield. Equity volatility was derived using a blended volatility assumption of 50% weight on Root’s historical volatility calculated from daily stock returns since IPO to the grant date and a 50% weight based on Root’s term matched simple average peer volatility as of the valuation date because our company-specific volatility is not sufficient by itself at the time of grant. The expense is recognized via a graded vesting method over the derived service period. In the event that both the service condition and market condition are met earlier, expense would be accelerated. If the service condition is not achieved, previously recognized compensation cost for the associated tranche is reversed. In the event that the market conditions are never achieved before the expiration date, but the service condition is met, the respective compensation costs remain recognized. Warrant Compensation—In October 2021, we closed the Investment Agreement with Carvana that included the issuance of 14.1 million shares of redeemable convertible preferred stock designated as the Series A Convertible Preferred Stock and the issuance of eight tranches of warrants to purchase shares of the Company’s Class A common stock. As part of the Investment Agreement, we and Carvana also entered into a five-year commercial agreement whereby our auto insurance products will be embedded into the Integrated Platform. The commercial agreement provides for agent commissions payable to Carvana for policy origination and an enterprise total loss replacement vehicle solution. The Carvana warrants compensation expense is recognized based on the grant date fair value of the award, which was determined using a Monte Carlo simulation in a risk-neutral framework, as contemplated in the Income Approach of valuation. Specifically, future equity is simulated in each period assuming a Geometric Brownian Motion. We considered the features of the warrants and the interdependency of exercise decisions between the Short-Term Warrants and the Long-Term Warrants in using the Monte Carlo simulation in order to determine the optimum exercise decision. The optimum exercise decision was made by choosing the option which would give the highest aggregate expected value to the holder in each of the 100,000 simulated paths. The payoff of each path is then calculated based on the simulated equity and discounted back to time zero using the applicable risk-free rates. The fair value of the warrants are then calculated as the average value from all simulation paths. Employing a Monte Carlo simulation with Geometric Brownian Motion requires a range of inputs for each uncertain variable, and establishing linkage between the assumptions, if necessary. Inputs and assumptions used in our analysis included our stock price at grant date, exercise prices, the term of the warrants, equity volatility, risk-free rate and dividend yield. Additional considerations included a discount for lack of marketability resulting from Carvana’s five-year lock-up period. These warrants vest as the parties develop an integrated automobile insurance solution for the Integrated Platform and insurance sales through the Integrated Platform. The associated compensation expense is dependent on our periodic assessment of the probability of the milestones being achieved. If deemed probable, we recognize compensation expense on a pro-rata basis considering progress toward achieving the milestones. If a performance condition is no longer probable of achievement, any previously recognized compensation expense is reversed and no subsequent compensation expense is recognized until achievement is once again probable, at which point a cumulative catch-up is recognized. In determining the classification as equity, we followed guidance issued within ASC 480, Distinguishing Liabilities from Equity, and ASC 815, Derivatives and Hedging.
Net Loss Per Share	Net Loss Per Share—Net loss per share, or EPS, results are a key indicator of the overall performance relative to each share of our outstanding common stock. Basic EPS for both Class A and Class B common stock is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares vested and outstanding during the period. In addition to common shares outstanding, the computation of basic EPS includes instruments for which the holder is deemed to have the present rights to share in current period earnings (loss) with common stockholders. Diluted EPS for both Class A and Class B common stock includes all the components of basic EPS, plus the dilutive effect of common stock equivalents, but excludes those common stock equivalents from the calculation of diluted EPS when the effect of inclusion, assessed individually, would be anti-dilutive. Notable dilutive securities relevant to our operations are stock options, nonvested shares subject to repurchase, restricted stock units, performance-based restricted stock units, warrants and redeemable convertible preferred stock. We have operated at a loss for the years ended December 31, 2023, 2022 and 2021. Therefore, the conversion of common stock equivalents would increase the denominator of the EPS calculation and create a lower loss per share. Therefore, these common stock equivalents are considered antidilutive and diluted EPS is equal to basic EPS. Losses are allocated equally between both classes of common stock because they are entitled to the same liquidation and dividend rights.
Recently Adopted Accounting Pronouncements/Recently Issued Financial Accounting Standards Not Yet Adopted	Recently Adopted Accounting Pronouncements— There were no accounting standards adopted in 2023 that had a material impact in our consolidated financial statements. Recently Issued Financial Accounting Standards Not Yet Adopted— In November 2023, the FASB issued Accounting Standards Update, or ASU, No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU looks to provide improvements to the segment disclosure by providing users with more decision-useful information about reportable segments in a public entity. The main provisions require a company to disclose, on an annual and interim basis, significant expenses included within each reported measure of segment profit or loss, an amount for other segment items by reportable segment and a description of its composition. It also requires all annual disclosures about a reportable segments’ profit or loss and assets to be reported on an interim basis. Although we operate in only one reporting segment, we are still required to provide all the disclosures required by this ASU and all existing segment disclosures in Topic 280. The ASU is to be applied retrospectively to all prior periods presented in the financial statements with an effective date for all public entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the impact of this ASU. In December 2023, the FASB issues ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU looks to enhance the transparency and decision usefulness of income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The main provisions to the rate reconciliation disclosure require public entities on an annual basis to: disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. The main provisions to the income taxes paid disclosure require that all entities disclose on an annual basis: the amount of income taxes paid disaggregated by federal, state and foreign taxes and the amount of income taxes paid disaggregated by individual jurisdictions in which income taxes paid meets a quantitative threshold. This ASU also requires all entities to disclose: income (loss) from continuing operations before income tax expense (benefit) disaggregated between domestic and foreign and income tax expense (benefit) from continuing operations disaggregated by federal, state and foreign. This ASU is to be applied on a prospective basis with an effective date for all public entities for annual periods beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the impact of this ASU.

LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES - Schedule of Reserve Balance (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward]
Gross loss and LAE reserves, January 1	$ 287.4	$ 320.2	$ 237.2
Reinsurance recoverable on unpaid losses	(76.4)	(79.5)	(79.6)
Net loss and LAE reserves, January 1	211.0	240.7	157.6
Net incurred loss and LAE related to:
Current year	338.3	348.1	405.9
Prior years	(7.0)	2.9	(13.6)
Total incurred	331.3	351.0	392.3
Net paid loss and LAE related to:
Current year	165.9	215.6	226.4
Prior years	136.0	165.1	82.8
Total paid	301.9	380.7	309.2
Net loss and LAE reserves	240.4	211.0	240.7
Plus reinsurance recoverable on unpaid losses	43.8	76.4	79.5
Gross loss and LAE reserves, December 31	$ 284.2	$ 287.4	$ 320.2

OTHER COMPREHENSIVE INCOME (LOSS) AND ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (Tables)

12 Months Ended

Dec. 31, 2023

Equity [Abstract]

Schedule of Accumulated Other Comprehensive (Loss) Income

The following table presents the changes in our accumulated other comprehensive (loss) income, or AOCI, for the years ended December 31, 2023, 2022 and 2021:


	For the Years Ended December 31,
	2023		2022		2021
	(dollars in millions)

Beginning balance	$	(5.8)	$	0.4	$	5.6
Other comprehensive income (loss) before reclassifications	3.3		(6.9)		(2.8)
Net realized losses (gains) on investments reclassified from AOCI to net loss	—		0.7		(2.4)
Other comprehensive income (loss)	3.3		(6.2)		(5.2)
Ending balance	$	(2.5)	$	(5.8)	$	0.4

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Accounting Policies [Abstract]
Cash and cash equivalents	$ 678.7	$ 762.1
Restricted cash	1.0	1.0
Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows	$ 679.7	$ 763.1	$ 707.0	$ 1,113.8

LOSS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Schedule of Earnings Per Share

The following table displays the computation of basic and diluted loss per share for both Class A and Class B common stock for the years ended December 31, 2023, 2022 and 2021:


	For the Years Ended December 31,
	2023		2022		2021
	(in millions, except per share amounts)
Net loss	$	(147.4)	$	(297.7)	$	(521.1)
Weighted-average common shares outstanding: basic and diluted (both Class A and B)	14.4		14.1		13.8
Loss per common share: basic and diluted (both Class A and B)	$	(10.24)	$	(21.11)	$	(37.76)

Schedule of Anti-Dilutive Securities

We excluded the following potentially dilutive common stock equivalents, presented based on amounts outstanding at each year end, from the computation of diluted EPS attributable to common stockholders for the years indicated because including them would have had an anti-dilutive effect:


	For the Years Ended December 31,
	2023	2022	2021
	(in millions)
Options to purchase common stock	0.1	0.2	0.4
Nonvested shares subject to repurchase	0.1	0.1	0.1
RSUs and PSUs	1.9	1.1	0.5
Redeemable convertible preferred stock (as converted to common stock)	0.8	0.8	0.8
Warrants to purchase common stock	7.7	7.7	7.2
Total	10.6	9.9	9.0

INCOME TAXES - Schedule of Operating Loss and Tax Credit Carryforwards (Details) $ in Millions	Dec. 31, 2023 USD ($)
Operating Loss Carryforwards [Line Items]
Operating loss and tax credit carryforwards, subject to expiration	$ 836.7
Operating loss and tax credit carryforwards, not subject to expiration	941.6
Operating loss and tax credit carryforwards	1,778.3
Research and development credits
Operating Loss Carryforwards [Line Items]
Carryforward with expiration	0.9
Carryforward indefinitely	0.0
Total	0.9
Federal
Operating Loss Carryforwards [Line Items]
Carryforward with Expiration	662.4
Carryforward Indefinitely	673.8
Total	1,336.2
State (gross, apportioned)
Operating Loss Carryforwards [Line Items]
Carryforward with Expiration	173.4
Carryforward Indefinitely	267.8
Total	$ 441.2

SHARE-BASED COMPENSATION - Schedule of RSU Activity (Details) - Restricted stock unit expense - USD ($) $ / shares in Units, shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Number of Shares
Beginning balance (in shares)	1.1	0.5
Granted (in shares)	1.6	1.1
Vested (in shares)	(0.6)	(0.1)
Forfeited, expired or canceled (in shares)	(0.2)	(0.4)
Ending balance (in shares)	1.9	1.1
Weighted-Average Grant Date Fair Value per Share
Beginning balance (in dollars per shares)	$ 51.81	$ 162.36
Granted (in dollars per shares)	6.67	31.34
Vested (in dollars per shares)	50.53	135.25
Forfeited, expired or canceled (in dollars per share)	51.90	81.38
Ending balance (in dollars per shares)	$ 14.47	$ 51.81
Aggregate Intrinsic Value
Beginning balance	$ 5.0	$ 27.4
Vested	3.4	3.3
Ending balance	$ 20.3	$ 5.0

LONG-TERM DEBT - Narrative (Details) $ / shares in Units, shares in Millions	1 Months Ended	12 Months Ended
	Jan. 31, 2022 $ / shares shares	Dec. 31, 2023 USD ($) state insurance_policy	Dec. 31, 2022	Dec. 31, 2021	Jan. 27, 2022 USD ($)
Debt Instrument [Line Items]
Trading days weighted average price \| state		30
Fair value of warrants percentage (in percent)		1.00%
Gross Written Premiums \| Geographic Concentration Risk
Debt Instrument [Line Items]
Concentration percentage (in percent)		100.00%	100.00%	100.00%
Class A Shares
Debt Instrument [Line Items]
Warrants outstanding (in shares) \| shares	0.3
Exercise price of warrants (in dollars per share) \| $ / shares	$ 162.00
Fair value of warrants					$ 600,000
Warrants issued and outstanding shares percentage (in percent)		1.00%
Term Loan
Debt Instrument [Line Items]
Insurance subsidiaries amount		$ 200,000,000
Term Loan \| Covenant Scenario 1
Debt Instrument [Line Items]
Insurance subsidiaries amount		$ 150,000,000
Debt instrument, issued shares insurance policies \| insurance_policy		62,500
Term Loan \| Covenant Scenario 1 \| Gross Written Premiums \| Geographic Concentration Risk
Debt Instrument [Line Items]
Concentration percentage (in percent)		12.00%
Term Loan \| Covenant Scenario 2
Debt Instrument [Line Items]
Debt instrument, covenant compliance, maximum monthly cash spend		$ 12,000,000
Term Loan \| SOFR
Debt Instrument [Line Items]
Debt instrument, floor interest rate (in percent)	1.00%
Variable rate percentage (in percent)	9.00%

LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES

12 Months Ended

Dec. 31, 2023

Insurance [Abstract]

LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES

The following provides a reconciliation of the beginning and ending reserve balances for loss and LAE, net of reinsurance:


	2023		2022		2021
	(dollars in millions)
Gross loss and LAE reserves, January 1	$	287.4	$	320.2	$	237.2
Reinsurance recoverable on unpaid losses	(76.4)		(79.5)		(79.6)
Net loss and LAE reserves, January 1	211.0		240.7		157.6
Net incurred loss and LAE related to:
Current year	338.3		348.1		405.9
Prior years	(7.0)		2.9		(13.6)
Total incurred	331.3		351.0		392.3
Net paid loss and LAE related to:
Current year	165.9		215.6		226.4
Prior years	136.0		165.1		82.8
Total paid	301.9		380.7		309.2
Net loss and LAE reserves, December 31	240.4		211.0		240.7
Plus reinsurance recoverable on unpaid losses	43.8		76.4		79.5
Gross loss and LAE reserves, December 31	$	284.2	$	287.4	$	320.2

Incurred losses and LAE attributable to prior accident years was a decrease of $7.0 million, an increase of $2.9 million and a decrease of $13.6 million during 2023, 2022 and 2021, respectively.


Incurred Losses and ALAE—Net of Reinsurance
Accident Year	2017 (unaudited)		2018 (unaudited)		2019 (unaudited)		2020 (unaudited)		2021 (unaudited)		2022 (unaudited)		2023		IBNR		Reported Claims(1)
			(dollars in millions)
2017	$	1.2	$	1.1	$	1.1	$	1.1	$	1.1	$	1.1	$	1.1	$	—	556
2018			42.3		48.3		49.6		48.7		48.3		48.5		0.1		18,116
2019					287.3		306.3		304.7		306.0		305.9		0.8		90,185
2020							295.9		287.7		286.2		286.8		2.1		117,180
2021									341.6		348.1		349.6		7.9		151,999
2022											296.0		288.4		16.0		118,731
2023													291.2		102.4		82,578
Total													$	1,571.5	$	129.3	579,345

Cumulative Paid Losses and ALAE—Net of Reinsurance
Accident Year	2017 (unaudited)		2018 (unaudited)		2019 (unaudited)		2020 (unaudited)		2021 (unaudited)		2022 (unaudited)		2023
			(dollars in millions)
2017	$	0.6	$	0.9	$	1.0	$	1.1	$	1.1	$	1.1	$	1.1
2018			20.6		44.6		48.1		48.1		47.7		48.0
2019					177.0		277.7		296.2		302.1		304.5
2020							182.0		238.5		269.9		280.9
2021									179.4		294.6		332.3
2022											175.3		248.3
2023													133.9
Total													1,349.0
Loss and ALAE reserves—net of reinsurance													$	222.5

_______________

(1) Reported by claim event.


	2023		2022
	(dollars in millions)
Loss and ALAE reserves—net of reinsurance	$	222.5	$	195.0
ULAE reserves—net of reinsurance	17.9		16.0
Reinsurance recoverables on unpaid losses	43.8		76.4
Total loss and LAE reserves—gross of reinsurance	$	284.2	$	287.4

The following table sets forth the historical average annual percentage payout of incurred losses and ALAE (claims duration), net of reinsurance, as of December 31, 2023:


Year	1		2		3		4		5		6		7
Incremental paid(1)	53.8	%	31.3	%	8.8	%	3.7	%	—	%	0.3	%	—	%

_______________

(1) Supplemental information and unauditedSTATUTORY FINANCIAL INFORMATION


	Statutory Net Loss						Statutory Capital and Surplus
	2023		2022		2021		2023		2022
	(in millions)
Root Insurance Company	$	(44.4)	$	(125.7)	$	(126.9)	$	60.1	$	77.0
Root Property & Casualty	(12.2)		(30.8)		(33.4)		21.3		20.3
Total	$	(56.6)	$	(156.5)	$	(160.3)	$	81.4	$	97.3

LOSS PER SHARE - Schedule of Basic and Diluted Loss per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Earnings Per Share [Abstract]
Net loss	$ (147.4)	$ (297.7)	$ (521.1)
Weighted-average common shares outstanding: basic (both Class A and B) (in shares)	14.4	14.1	13.8
Weighted-average common shares outstanding: diluted (both Class A and B) (in shares)	14.4	14.1	13.8
Loss per common share: basic (both Class A and B) (in dollars per share)	$ (10.24)	$ (21.11)	$ (37.76)
Loss per common share: diluted (both Class A and B) (in dollars per share)	$ (10.24)	$ (21.11)	$ (37.76)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

During the normal course of business, we enter into various agreements to purchase services, primarily data and information technology based services, that are enforceable and legally binding. Certain supply contracts contain penalty provisions for early termination, in addition to variable costs that are based on volume and usage. We do not expect to incur penalty payments under these provisions that would materially affect our financial position, results of operations or cash flows.

The following table summarizes, by remaining maturity, future commitments related to other arrangements as of December 31, 2023:


	Purchase Obligations
	(dollars in millions)
2024	$	13.3
2025	13.9
2026	11.0
2027	—
2028 and thereafter	—
Total	$	38.2

From time to time, we are party to litigation and legal proceedings relating to our business operations. Except as disclosed below, we do not believe that we are party to any current or pending legal action that could reasonably be expected to have a material adverse effect on our financial condition or results of operations and cash flow.

On December 19, 2022, a purported class action complaint was filed against the Company’s subsidiary, Root Insurance Company, in the U.S. District Court for the Western District of Texas (Case No. 1:22-cv-01328-LY) by an individual on her behalf and further claiming to represent a putative class of insureds. The complaint alleges that Root Insurance Company breached its insurance contract and violated specific provisions of the Texas Prompt Payment of Claims Act for an alleged failure to include sales tax in total loss vehicle settlements. The complaint seeks damages to include payment of alleged benefits owed under the policy, in addition to pre- and post-judgment interest and attorneys fees on behalf of the named plaintiff and the putative class members. Root Insurance Company’s motion to dismiss the claims set forth in the complaint was granted and the lawsuit was dismissed with prejudice on August 22, 2023, which dismissal has been appealed. The Company believes that the claims in this lawsuit are without merit and intends to defend against them vigorously. The lawsuit is in its early stages. Therefore, at this time, we cannot predict the outcome or estimate the likelihood or magnitude of our possible or potential loss contingency.

On June 27, 2022, a verified shareholder derivative complaint was filed against certain of the Company’s current and former officers and directors in the U.S. District Court for the District of Delaware (Case No. 1:22-cv-00865). The Company was named as a nominal defendant. The complaint alleges that defendants made false or misleading statements and omissions of purportedly material fact, in violation of Section 10(b) of the Securities Exchange Act of 1934, or the Exchange Act, and Rule 10b-5 thereunder, breached their fiduciary duties and/or aided and abetted the breach of fiduciary duties, were unjustly enriched, wasted corporate assets, and are liable under Section 11(f) of the Securities Act of 1933, or the Securities Act, in connection with and following the Company’s initial public offering. The complaint seeks unspecified damages. The Company believes that the claims in this lawsuit are without merit and intends to defend against them vigorously. The lawsuit is currently stayed pending final resolution of the below matter and, at this time, we cannot predict the outcome or estimate the likelihood or magnitude of our possible or potential loss contingency.

On March 19, 2021, a purported class action complaint was filed against the Company and certain of its current and former officers and directors in the U.S. District Court for the Southern District of Ohio (Case No. 2:21-cv-01197) on behalf of certain Root shareholders. The complaint alleges that defendants made false or misleading statements and omissions of purportedly material fact, in violation of Sections 10(b) and 20(a) of the Exchange Act

and Rule 10b-5 thereunder, and of Sections 11 and 15 of the Securities Act in connection with and following the Company’s initial public offering. The complaint seeks unspecified damages. The defendants’ motion to dismiss the claims set forth in the complaint was granted and the lawsuit was dismissed with prejudice on March 31, 2023, which dismissal has been appealed. The Company believes that the claims in this lawsuit are without merit and intends to defend against them vigorously. The lawsuit is in the early stages and, at this time, we cannot predict the outcome or estimate the likelihood or magnitude of our possible or potential loss contingency.

We are contingently liable for possible future assessments under regulatory requirements for insolvencies and impairments of unaffiliated insurance companies.

LOSS PER SHARE

12 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

LOSS PER SHARE

The following table displays the computation of basic and diluted loss per share for both Class A and Class B common stock for the years ended December 31, 2023, 2022 and 2021:


	For the Years Ended December 31,
	2023		2022		2021
	(in millions, except per share amounts)
Net loss	$	(147.4)	$	(297.7)	$	(521.1)
Weighted-average common shares outstanding: basic and diluted (both Class A and B)	14.4		14.1		13.8
Loss per common share: basic and diluted (both Class A and B)	$	(10.24)	$	(21.11)	$	(37.76)


	For the Years Ended December 31,
	2023	2022	2021
	(in millions)
Options to purchase common stock	0.1	0.2	0.4
Nonvested shares subject to repurchase	0.1	0.1	0.1
RSUs and PSUs	1.9	1.1	0.5
Redeemable convertible preferred stock (as converted to common stock)	0.8	0.8	0.8
Warrants to purchase common stock	7.7	7.7	7.2
Total	10.6	9.9	9.0

GEOGRAPHICAL BREAKDOWN OF GROSS PREMIUMS WRITTEN (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Effects of Reinsurance [Line Items]
Total	$ 783.1	$ 600.0	$ 742.6
Texas
Effects of Reinsurance [Line Items]
Total	134.3	109.3	152.3
Georgia
Effects of Reinsurance [Line Items]
Total	94.3	62.3	79.2
Colorado
Effects of Reinsurance [Line Items]
Total	53.6	40.6	33.5
Pennsylvania
Effects of Reinsurance [Line Items]
Total	45.2	34.9	39.8
Arizona
Effects of Reinsurance [Line Items]
Total	35.4	17.1	23.5
South Carolina
Effects of Reinsurance [Line Items]
Total	34.4	20.1	26.3
Utah
Effects of Reinsurance [Line Items]
Total	30.8	30.9	33.8
Ohio
Effects of Reinsurance [Line Items]
Total	26.7	15.1	18.0
Oklahoma
Effects of Reinsurance [Line Items]
Total	23.6	19.8	22.5
Missouri
Effects of Reinsurance [Line Items]
Total	22.9	17.2	24.7
All others states
Effects of Reinsurance [Line Items]
Total	$ 281.9	$ 232.7	$ 289.0
Geographic Concentration Risk \| Gross Written Premiums
Effects of Reinsurance [Line Items]
Concentration percentage (in percent)	100.00%	100.00%	100.00%
Geographic Concentration Risk \| Texas \| Gross Written Premiums
Effects of Reinsurance [Line Items]
Concentration percentage (in percent)	17.10%	18.20%	20.50%
Geographic Concentration Risk \| Georgia \| Gross Written Premiums
Effects of Reinsurance [Line Items]
Concentration percentage (in percent)	12.00%	10.40%	10.70%
Geographic Concentration Risk \| Colorado \| Gross Written Premiums
Effects of Reinsurance [Line Items]
Concentration percentage (in percent)	6.80%	6.80%	4.50%
Geographic Concentration Risk \| Pennsylvania \| Gross Written Premiums
Effects of Reinsurance [Line Items]
Concentration percentage (in percent)	5.80%	5.80%	5.40%
Geographic Concentration Risk \| Arizona \| Gross Written Premiums
Effects of Reinsurance [Line Items]
Concentration percentage (in percent)	4.50%	2.90%	3.20%
Geographic Concentration Risk \| South Carolina \| Gross Written Premiums
Effects of Reinsurance [Line Items]
Concentration percentage (in percent)	4.40%	3.40%	3.50%
Geographic Concentration Risk \| Utah \| Gross Written Premiums
Effects of Reinsurance [Line Items]
Concentration percentage (in percent)	3.90%	5.20%	4.60%
Geographic Concentration Risk \| Ohio \| Gross Written Premiums
Effects of Reinsurance [Line Items]
Concentration percentage (in percent)	3.40%	2.50%	2.40%
Geographic Concentration Risk \| Oklahoma \| Gross Written Premiums
Effects of Reinsurance [Line Items]
Concentration percentage (in percent)	3.00%	3.30%	3.00%
Geographic Concentration Risk \| Missouri \| Gross Written Premiums
Effects of Reinsurance [Line Items]
Concentration percentage (in percent)	2.90%	2.90%	3.30%
Geographic Concentration Risk \| All others states \| Gross Written Premiums
Effects of Reinsurance [Line Items]
Concentration percentage (in percent)	36.20%	38.60%	38.90%

INCOME TAXES - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Federal income tax rate	21.00%	21.00%	21.00%
Valuation allowance	$ 356.4	$ 322.3
Valuation allowance increase	$ 34.1	$ 67.3

CAPITAL STOCK (Details) $ / shares in Units, $ in Millions	1 Months Ended	12 Months Ended
CAPITAL STOCK (Details) $ / shares in Units, $ in Millions	Oct. 31, 2021 USD ($) tranche vote $ / shares shares	Dec. 31, 2023 USD ($) $ / shares shares	Dec. 31, 2021 USD ($) shares	Dec. 31, 2022 USD ($) shares	Dec. 31, 2020 USD ($)
Temporary Equity [Line Items]
Preferred stock, issued (in shares)		14,100,000		14,100,000
Preferred stock, outstanding (in shares)		14,100,000		14,100,000
Preferred stock, liquidation preference \| $		$ 126.5
Debt issuance costs \| $	$ 19.6	3.0
Carrying value \| $		$ 112.0	$ 112.0	$ 112.0	$ 0.0
Retirement of treasury shares \| $			$ 0.0
Preferred stock, dividend percentage		5.00%
Treasury Stock
Temporary Equity [Line Items]
Retirement of treasury shares (in shares)	300,000		300,000
Retirement of treasury shares \| $	$ 0.8		$ (0.8)
Root, Inc \| Carvana
Temporary Equity [Line Items]
Ownership percentage (as percent)		9.90%
Redeemable convertible preferred stock (as converted to common stock)
Temporary Equity [Line Items]
Debt issuance costs \| $		$ 14.5
Additional Paid-In Capital
Temporary Equity [Line Items]
Debt issuance costs \| $		4.7
Other Assets
Temporary Equity [Line Items]
Debt issuance costs \| $		$ 0.4
Short Term Warrant
Temporary Equity [Line Items]
Number of tranches \| tranche	3
Carvana
Temporary Equity [Line Items]
Preferred stock, issued (in shares)	14,100,000
Number of tranches \| tranche	8
Conversion price (in dollars per share) \| $ / shares	$ 9.00	$ 162.00
Common stock, shares issued (in shares)		800,000
Class A Shares
Temporary Equity [Line Items]
Common stock, shares authorized (in shares)		1,000,000,000.0
Voting rights \| vote	1
Conversion of stock (in shares)		1
Common stock, shares issued (in shares)		9,500,000		9,200,000
Class B Shares
Temporary Equity [Line Items]
Common stock, shares authorized (in shares)		269,000,000.0
Voting rights \| vote	10
Common stock, shares issued (in shares)		5,000,000.0		5,000,000.0
Series A Preferred Stock \| Carvana
Temporary Equity [Line Items]
Proceeds from issuance of convertible stock \| $	$ 126.5

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details)			12 Months Ended
	Aug. 12, 2022 $ / shares shares	Jan. 26, 2022 USD ($)	Dec. 31, 2023 USD ($) segment consecutive_trading_day $ / shares shares	Dec. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2021 USD ($)	Oct. 31, 2021 tranche $ / shares shares
Asset Acquisition [Line Items]
Conversion ratio	0.05556
Conversion of stock, shares issued (in shares) \| shares	1
Shares converted (in shares) \| shares	18
Common stock, par value (in dollars per share) \| $ / shares	$ 0.0001
Purchases of indefinite-lived intangible assets and transaction costs			$ 0	$ 1,300,000	$ 0
Impairment of intangible assets			$ 0	0	0
Number of reportable segments \| segment			1
Reinsurance premiums payable			$ 54,400,000	119,800,000
Premiums receivable			247,100,000	111,900,000
Allowance for premiums receivable			4,000,000.0	2,800,000
Bad debt expense adjusted for CECL			12,500,000
Bad debt expense			14,100,000	17,400,000	20,900,000
Deferred policy acquisition cost			18,000,000	6,700,000
Amortization of deferred acquisition costs			35,100,000	22,500,000	26,400,000
Allowance for credit loss			1,800,000	200,000
Valuation allowance			$ 356,400,000	322,300,000
Amortization period			5 years
Amortization expense			$ 6,300,000	5,000,000	3,700,000
Depreciation expense			$ 1,500,000	$ 2,100,000	$ 4,600,000
Preferred stock, issued (in shares) \| shares			14,100,000	14,100,000
Preferred stock, par value (in dollars per share) \| $ / shares	0.0001		$ 0.0001	$ 0.0001
Term Loan \| Secured debt
Asset Acquisition [Line Items]
Debt amount		$ 300,000,000
Debt instrument, term		5 years
Internet Domain Names
Asset Acquisition [Line Items]
Purchase of assets			$ 1,300,000	$ 1,300,000
Carvana
Asset Acquisition [Line Items]
Conversion price (in dollars per share) \| $ / shares			$ 162.00			$ 9.00
Preferred stock, issued (in shares) \| shares						14,100,000
Number of tranches \| tranche						8
Investment agreement, term of agreement						5 years
Unaffiliated Texas County Mutual Insurance Company
Asset Acquisition [Line Items]
Reinsurance premiums payable			$ 60,500,000	14,200,000
Premiums receivable			$ 59,200,000	14,100,000
Stock option expense
Asset Acquisition [Line Items]
Exercisable period			10 years
Vesting period			4 years
Stock option expense \| Tranche 1
Asset Acquisition [Line Items]
Vesting period			1 year
Vesting percentage			25.00%
Stock option expense \| Tranche 2
Asset Acquisition [Line Items]
Vesting period			3 years
Vesting percentage			2.00%
Restricted stock unit expense \| Tranche 1
Asset Acquisition [Line Items]
Vesting period			1 year
Vesting percentage			50.00%
Restricted stock unit expense \| Tranche 2
Asset Acquisition [Line Items]
Vesting period			1 year
Vesting percentage			25.00%
Restricted stock unit expense \| Minimum
Asset Acquisition [Line Items]
Vesting period			2 years
Restricted stock unit expense \| Maximum
Asset Acquisition [Line Items]
Vesting period			4 years
Performance-based restricted stock unit expense
Asset Acquisition [Line Items]
Expected volatility rate			76.00%
Performance-based restricted stock unit expense \| Monte Carlo Valuation
Asset Acquisition [Line Items]
Expected volatility rate			50.00%
Volatility, weighted-average			50.00%
Performance-based restricted stock unit expense \| Minimum
Asset Acquisition [Line Items]
Vesting period			1 year
Performance-based restricted stock unit expense \| Maximum
Asset Acquisition [Line Items]
Vesting period			4 years
Other Certain RSUs 1
Asset Acquisition [Line Items]
Vesting period			4 years
Other Certain RSUs 1 \| Tranche 1
Asset Acquisition [Line Items]
Vesting period			1 year
Vesting percentage			25.00%
Other Certain RSUs 2 \| Tranche 1
Asset Acquisition [Line Items]
Vesting period			3 years
Vesting percentage			2.00%
Other Certain RSUs 3 \| Tranche 1
Asset Acquisition [Line Items]
Vesting period			1 year
Computers
Asset Acquisition [Line Items]
Useful life			3 years
Furniture
Asset Acquisition [Line Items]
Useful life			5 years
Root Property & Casualty
Asset Acquisition [Line Items]
Purchases of indefinite-lived intangible assets and transaction costs			$ 8,900,000	$ 8,900,000
Class A Shares
Asset Acquisition [Line Items]
Common stock, par value (in dollars per share) \| $ / shares			$ 0.0001	$ 0.0001
Consecutive trading days \| consecutive_trading_day			45
Series A Convertible Preferred Stock
Asset Acquisition [Line Items]
Conversion price (in dollars per share) \| $ / shares	$ 162.00

INVESTMENTS

12 Months Ended

Dec. 31, 2023

Investments, Debt and Equity Securities [Abstract]

INVESTMENTS

The amortized cost and fair value of short-term investments and available-for-sale fixed maturity securities at December 31, 2023 and 2022 are as follows:



	2023
	Amortized Cost		Allowance for Expected Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(dollars in millions)
Fixed maturities:
U.S. Treasury securities and agencies	$	14.6	$	—	$	0.1	$	(0.1)	$	14.6
Municipal securities	24.8		—		0.1		(0.8)		24.1
Corporate debt securities	66.3		—		0.2		(1.3)		65.2
Residential mortgage-backed securities	12.0		—		0.1		(0.2)		11.9
Commercial mortgage-backed securities	30.4		—		0.1		(0.7)		29.8
Other debt obligations	20.3		—		0.1		(0.1)		20.3
Total fixed maturities	168.4		—		0.7		(3.2)		165.9
Short-term investments	0.9		—		—		—		0.9
Total	$	169.3	$	—	$	0.7	$	(3.2)	$	166.8


	2022
	Amortized Cost		Allowance for Expected Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(dollars in millions)
Fixed maturities:
U.S. Treasury securities and agencies	$	11.3	$	—	$	—	$	(0.3)	$	11.0
Municipal securities	21.4		—		—		(1.2)		20.2
Corporate debt securities	60.5		—		—		(2.7)		57.8
Residential mortgage-backed securities	5.5		—		—		(0.3)		5.2
Commercial mortgage-backed securities	24.4		—		—		(1.2)		23.2
Other debt obligations	11.1		—		0.1		(0.2)		11.0
Total fixed maturities	134.2		—		0.1		(5.9)		128.4
Short-term investments	0.4		—		—		—		0.4
Total	$	134.6	$	—	$	0.1	$	(5.9)	$	128.8

Management reviewed the available-for-sale fixed maturity securities at each balance sheet date to consider whether it was necessary to recognize a credit loss as of December 31, 2023 and 2022. We do not intend to sell the investments and it is not more likely than not that we will be required to sell the security before recovery. Management concluded that the available-for-sale fixed maturity securities’ unrealized losses were due to non-credit related factors and, therefore, there was no allowance for credit loss as of December 31, 2023 and 2022.


	2023
	Less than 12 Months						12 Months or More				Total
	Fair Value				Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
	(dollars in millions)
Fixed maturities:
U.S. Treasury securities and agencies	$	1.7			$	—	$	2.4	$	(0.1)	$	4.1	$	(0.1)
Municipal securities	3.1				—		15.1		(0.8)		18.2		(0.8)
Corporate debt securities	13.4				—		35.1		(1.3)		48.5		(1.3)
Residential mortgage-backed securities	4.1				—		1.9		(0.2)		6.0		(0.2)
Commercial mortgage-backed securities	9.1				(0.1)		13.4		(0.6)		22.5		(0.7)
Other debt obligations	4.4				—		4.4		(0.1)		8.8		(0.1)
Total fixed maturities	35.8				(0.1)		72.3		(3.1)		108.1		(3.2)
Short-term investments	0.3				—		—		—		0.3		—
Total	$	36.1			$	(0.1)	$	72.3	$	(3.1)	$	108.4	$	(3.2)

	2022
	Less than 12 Months						12 Months or More				Total
	Fair Value				Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
	(dollars in millions)
Fixed maturities:
U.S. Treasury securities and agencies	$	6.9	$	—	$	(0.1)	$	4.1	$	(0.2)	$	11.0	$	(0.3)
Municipal securities	11.5				(0.5)		8.2		(0.7)		19.7		(1.2)
Corporate debt securities	45.3				(1.6)		11.5		(1.1)		56.8		(2.7)
Residential mortgage-backed securities	2.2				—		1.9		(0.3)		4.1		(0.3)
Commercial mortgage-backed securities	18.3				(0.8)		4.6		(0.4)		22.9		(1.2)
Other debt obligations	6.8				(0.2)		—		—		6.8		(0.2)
Total fixed maturities	91.0				(3.2)		30.3		(2.7)		121.3		(5.9)
Short-term investments	0.1				—		—		—		0.1		—
Total	$	91.1			$	(3.2)	$	30.3	$	(2.7)	$	121.4	$	(5.9)

Other Investments

As of December 31, 2023 and 2022, other investments related to our private equity investments were $4.4 million. We recognized zero, $1.2 million and zero of realized gains in December 31, 2023, 2022 and 2021, respectively. We recorded the sale of one of our private equity investments within net realized gains on investments in our consolidated statements of operations and comprehensive loss. There were no impairment losses recognized on private equity investments for the years ended December 31, 2023, 2022 and 2021.


	For the Years Ended December 31,
	2023		2022		2021
	(dollars in millions)
Realized gains on investments	$	—	$	1.2	$	2.5
Realized losses on investments	—		(0.7)		(0.1)
Net realized gains on investments	$	—	$	0.5	$	2.4

The following table sets forth the amortized cost and fair value of short-term investments and available-for-sale fixed maturity securities by contractual maturity at December 31, 2023:


	2023
	Amortized Cost		Fair Value
	(dollars in millions)
Due in one year or less	$	25.7	$	25.4
Due after one year through five years	110.4		108.7
Due five years through 10 years	16.5		16.5
Due after 10 years	16.7		16.2
Total	$	169.3	$	166.8

The following table sets forth the components of net investment income for the years ended December 31, 2023, 2022 and 2021:


	For the Years Ended December 31,
	2023		2022		2021
	(dollars in millions)
Interest on bonds	$	4.8	$	2.4	$	2.4
Interest on deposits and cash equivalents	28.0		5.7		1.1
Other investments(1)	—		—		3.8
Total	32.8		8.1		7.3
Investment expense	(2.6)		(1.9)		(2.3)
Net investment income	$	30.2	$	6.2	$	5.0

______________

(1) Unrealized gains resulting from observable price changes related to our private equity investments.

The following tables summarize the credit ratings of short-term investments and available-for-sale fixed maturity securities at December 31, 2023 and 2022:


	December 31, 2023
	Amortized Cost		Fair Value		% of Total Fair Value
S&P Global rating or equivalent	(dollars in millions)
AAA	$	53.0	$	52.1	31.2	%
AA+, AA, AA-, A-1	59.4		58.8		35.3
A+, A, A-	42.1		41.2		24.7
BBB+, BBB, BBB-	14.8		14.7		8.8
Total	$	169.3	$	166.8	100.0	%



	December 31, 2022
	Amortized Cost		Fair Value		% of Total Fair Value
S&P Global rating or equivalent	(dollars in millions)
AAA	$	62.5	$	59.9	46.5	%
AA+, AA, AA-, A-1	19.9		19.1		14.8
A+, A, A-	38.4		36.5		28.3
BBB+, BBB, BBB-	13.8		13.3		10.4
Total	$	134.6	$	128.8	100.0	%

Pursuant to certain regulatory requirements, we are required to hold assets on deposit with various state insurance departments for the benefit of policyholders. These special deposits are included in available-for-sale fixed maturity securities on the consolidated balance sheets. As of December 31, 2023 and 2022, these required deposits had an amortized cost of $9.5 million and $11.7 million, respectively, and fair value of $9.4 million and $11.3 million, respectively.

INVESTMENTS - Contractual Maturity (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Amortized Cost
Due in one year or less	$ 25.7
Due after one year through five years	110.4
Due five years through 10 years	16.5
Due after 10 years	16.7
Amortized Cost	169.3	$ 134.6
Fair Value
Due in one year or less	25.4
Due after one year through five years	108.7
Due five years through 10 years	16.5
Due after 10 years	16.2
Total	$ 166.8	$ 128.8

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

The following table displays income tax expense (benefit) for the years ended December 31, 2023, 2022 and 2021:


	For the Years Ended December 31,
	2023		2022		2021
	(dollars in millions)
Current:
Federal	$	—	$	—	$	—
State	—		—		—

Total current	—		—		—
Deferred:
Federal	—		—		—
State	—		—		—

Total deferred	—		—		—
Total income tax expense (benefit)	$	—	$	—	$	—

Schedule of Effective Income Tax Reconciliation

The income tax expense (benefit) differed from the amounts computed by applying the statutory U.S. federal income tax rate of 21% in 2023, 2022 and 2021 to pretax income as a result of the following:


	2023				2022				2021
	(dollars in millions)
Loss before income taxes	$	(147.4)			$	(297.7)			$	(521.1)
Statutory U.S. federal income tax benefit	(30.9)		21.0	%	(62.5)		21.0	%	(109.4)		21.0	%
Valuation allowance on deferred tax assets	34.9		(23.7)		65.8		(22.1)		116.7		(22.4)

Share-based compensation	5.5		(3.7)		4.9		(1.6)		(3.3)		0.6
Nondeductible compensation	1.2		(0.8)		1.3		(0.4)		1.8		(0.3)
Return to provision permanent adjustments	—		—		(3.5)		1.2		(0.5)		0.1
State net operating loss	(10.5)		7.1		(7.1)		2.4		(4.9)		0.9
Other	(0.2)		0.1		1.1		(0.5)		(0.4)		0.1
Income tax expense (benefit)	$	—	—	%	$	—	—	%	$	—	—	%

Schedule of Deferred Tax Assets and Liabilities

The following table sets forth the tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2023 and 2022:


	2023		2022
	(dollars in millions)
Deferred tax assets:
Unpaid losses and loss adjustment expenses	$	2.1	$	1.9
Unearned premium reserves	10.0		2.7



Disallowed interest carryforward	19.4		16.5



Deferred compensation	7.3		6.1
Stock and warrant compensation	10.2		9.5


Other	6.0		7.8
State net operating loss carryforward	27.9		17.4
Net operating loss carryforward	280.6		266.4
Gross deferred assets	363.5		328.3
Less valuation allowance	(356.4)		(322.3)
Total deferred tax assets, less valuation allowance	7.1		6.0
Deferred tax liabilities:
Research and experimental expenditures	1.1		2.0
Fixed assets	0.7		1.3
Deferred policy acquisition costs	3.8		1.5
Intangible assets	0.4		0.3
Investments	1.0		0.8
Other	0.1		0.1
Deferred tax liabilities	7.1		6.0
Net deferred tax asset	$	—	$	—

Schedule of Operating Loss Carryforwards

The following table sets forth carryforwards related to NOLs and tax credits:


	Carryforward with Expiration		Carryforward Indefinitely		Total		Years of Expiration
	(dollars in millions)
Federal	$	662.4	$	673.8	$	1,336.2	2035 - 2043
State (gross, apportioned)	173.4		267.8		441.2		2024 - 2043
Research and development credits	0.9		—		0.9		2036 - 2038
Total	$	836.7	$	941.6	$	1,778.3

Schedule of Tax Credit Carryforwards

The following table sets forth carryforwards related to NOLs and tax credits:


	Carryforward with Expiration		Carryforward Indefinitely		Total		Years of Expiration
	(dollars in millions)
Federal	$	662.4	$	673.8	$	1,336.2	2035 - 2043
State (gross, apportioned)	173.4		267.8		441.2		2024 - 2043
Research and development credits	0.9		—		0.9		2036 - 2038
Total	$	836.7	$	941.6	$	1,778.3

LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES - Schedule of LAE by Accident Year (Details) $ in Millions	Dec. 31, 2023 USD ($) claim state	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Claims Development [Line Items]
Incurred Losses and ALAE—Net of Reinsurance	$ 1,571.5
IBNR	$ 129.3
Reported claims \| claim	579,345
Cumulative Paid Losses and ALAE—Net of Reinsurance	$ 1,349.0
Loss and ALAE reserves—net of reinsurance	222.5
2017
Claims Development [Line Items]
Incurred Losses and ALAE—Net of Reinsurance	1.1	$ 1.1	$ 1.1	$ 1.1	$ 1.1	$ 1.1	$ 1.2
IBNR	$ 0.0
Reported claims \| claim	556
Cumulative Paid Losses and ALAE—Net of Reinsurance	$ 1.1	1.1	1.1	1.1	1.0	0.9	$ 0.6
2018
Claims Development [Line Items]
Incurred Losses and ALAE—Net of Reinsurance	48.5	48.3	48.7	49.6	48.3	42.3
IBNR	$ 0.1
Reported claims \| claim	18,116
Cumulative Paid Losses and ALAE—Net of Reinsurance	$ 48.0	47.7	48.1	48.1	44.6	$ 20.6
2019
Claims Development [Line Items]
Incurred Losses and ALAE—Net of Reinsurance	305.9	306.0	304.7	306.3	287.3
IBNR	$ 0.8
Reported claims \| claim	90,185
Cumulative Paid Losses and ALAE—Net of Reinsurance	$ 304.5	302.1	296.2	277.7	$ 177.0
2020
Claims Development [Line Items]
Incurred Losses and ALAE—Net of Reinsurance	286.8	286.2	287.7	295.9
IBNR	$ 2.1
Reported claims \| claim	117,180
Cumulative Paid Losses and ALAE—Net of Reinsurance	$ 280.9	269.9	238.5	$ 182.0
2021
Claims Development [Line Items]
Incurred Losses and ALAE—Net of Reinsurance	349.6	348.1	341.6
IBNR	$ 7.9
Reported claims \| claim	151,999
Cumulative Paid Losses and ALAE—Net of Reinsurance	$ 332.3	294.6	$ 179.4
2022
Claims Development [Line Items]
Incurred Losses and ALAE—Net of Reinsurance	288.4	296.0
IBNR	$ 16.0
Reported claims \| claim	118,731
Cumulative Paid Losses and ALAE—Net of Reinsurance	$ 248.3	$ 175.3
2023
Claims Development [Line Items]
Incurred Losses and ALAE—Net of Reinsurance	291.2
IBNR	$ 102.4
Reported claims \| state	82,578
Cumulative Paid Losses and ALAE—Net of Reinsurance	$ 133.9

COMMITMENTS AND CONTINGENCIES (Details) $ in Millions	Dec. 31, 2023 USD ($)
Purchase Obligations
2024	$ 13.3
2025	13.9
2026	11.0
2027	0.0
2028 and thereafter	0.0
Total	$ 38.2

SHARE-BASED COMPENSATION

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

SHARE-BASED COMPENSATION

Warrants

As part of the Investment Agreement discussed in Note 11, “Capital Stock,” we issued Carvana eight tranches of warrants, comprised of three tranches of “short-term warrants” and five tranches of “long-term warrants.” However, the exercisability of certain tranches are subject to Carvana’s decision to exercise certain other tranches. If Carvana exercises short-term tranches, then long-term tranche 1 warrants are cancelled and the remaining long-term tranches would be reduced such that Carvana will have the opportunity to purchase a maximum of 7.2 million shares of Class A common stock.

As of December 31, 2023, we determined the remaining unvested short-term warrants were probable of vesting. Under that scenario, it is not a possible outcome for the long-term warrants to also vest, so they are considered not probable of vesting. We recognized warrant compensation expense related to these equity-classified warrants based on progress toward completing the Integrated Platform and policies originating through the Integrated Platform. In

September 2022, the Integrated Platform launched and as a result, tranche 1 of our short-term warrants vested. In November 2023, tranche 2 of our short-term warrants vested as a result of policies originated through the Integrated Platform. There were no exercises upon vesting and all warrants remain outstanding. All of these warrants are out-of-the-money and therefore have no intrinsic value as of December 31, 2023.

The following table displays warrant compensation expense recorded in the consolidated statements of operations and comprehensive loss:


	For the Years Ended December 31,
	2023		2022		2021
	(dollars in millions)
Warrant compensation expense:
Sales and marketing	$	—	$	8.8	$	8.8
Other insurance expense (benefit)	17.4		5.7		—
Total warrant compensation expense	$	17.4	$	14.5	$	8.8

The short-term warrants will expire September 1, 2025 and the long-term warrants will expire September 1, 2027. The following table provides other key terms of the warrants:



Warrants	Exercise Price		Shares Issued (in millions)	Grant Date Fair Value per Share		Vesting Condition
Short-Term
Tranche 1	$	180.00	2.4	$	0.42	Completing the Integrated Platform
Tranche 2	$	198.00	3.2	$	0.37	50,000 policy originations
Tranche 3	$	216.00	1.6	$	0.18	75,000 policy originations
Total Short-Term			7.2

Long-Term
Tranche 1	$	180.00	1.4	$	0.42	100,000 policy originations
Tranche 2	$	225.00	1.5	$	0.35	200,000 policy originations
Tranche 3	$	270.00	1.5	$	0.24	300,000 policy originations
Tranche 4	$	405.00	1.5	$	0.09	400,000 policy originations
Tranche 5	$	540.00	1.3	$	0.04	500,000 policy originations
Total Long-Term			7.2

As of December 31, 2023, there was $3.8 million of unrecognized compensation cost related to the warrants. The remaining costs are expected to be recognized over a period of approximately one year.

Employee Share-Based Compensation

2020 Equity Incentive Plan

We maintain an equity incentive plan, the 2020 Equity Incentive Plan, or the 2020 Plan, for the issuance and grant of equity awards (restricted stock, RSUs, PSUs, and incentive and nonqualified stock options) to our officers, directors, employees and certain advisors. As of December 31, 2023, the number of shares authorized under the 2020 Plan was 3.8 million shares of Class A common stock, inclusive of available shares previously reserved for issuance under the 2015 Equity Incentive Plan, or the 2015 Plan, and subject to increase for awards previously issued under the 2015 Plan which are forfeited or lapse unexercised. In addition, this reserve will automatically increase on January 1 of each year, which commenced on January 1, 2021 and will end on (and including) January 1, 2030, in an amount equal to 4% of the total number of shares of capital stock outstanding on December 31 of the preceding year. However, the board of directors may act prior to January 1 of a given year to provide that the increase for such year will be a lesser number of shares of Class A common stock. The aggregate maximum number

of shares of Class A common stock that may be issued pursuant to the exercise of incentive stock options is 6.7 million shares. As of December 31, 2023, the number of shares available for issuance under the 2020 Plan was 1.2 million.

In August 2022, our board of directors approved the First Amendment to our 2020 Employee Stock Purchase Plan, or ESPP. The number of shares of Class A common stock initially reserved for issuance under the ESPP is limited to 0.3 million shares. In addition, the number of shares reserved for issuance under the ESPP is subject to an annual increase on the first day of each calendar year beginning on January 1, 2021 and ending on and including January 1, 2030, in an amount equal to the lesser of (i) 1% of the total number of shares of capital stock outstanding on December 31 of the preceding year and (ii) 0.4 million shares of Class A common stock. Our board of directors may act prior to January 1 of a given year to provide that the increase for such year will be a lesser number of shares of Class A common stock.

2015 Equity Incentive Plan

In 2015, the board of directors of the Company adopted the 2015 Plan under which the Company could grant equity awards (restricted stock, and incentive and nonqualified stock options) to its officers, directors, employees and certain advisors. In October 2020, this plan was superseded by the 2020 Plan and all reserved shares under the 2015 Plan were transferred to the 2020 Plan.

The following table displays employee share-based compensation expense recorded in the consolidated statements of operations and comprehensive loss:


	For the Years Ended December 31,
	2023		2022		2021
	(dollars in millions)
Share-based compensation expense:
Loss and loss adjustment expenses	$	0.7	$	0.7	$	1.5
Sales and marketing	0.3		0.8		1.0
Other insurance expense (benefit)	0.6		0.8		1.6
Technology and development	3.4		3.3		4.5
General and administrative	12.3		24.9		10.7
Total share-based compensation expense	$	17.3	$	30.5	$	19.3

The following table provides total employee share-based compensation expense by type of award:


	For the Years Ended December 31,
	2023		2022		2021
	(dollars in millions)
Share-based compensation expense:
Restricted stock unit expense	$	15.8	$	28.8	$	14.9
Performance-based restricted stock unit expense	0.4		—		—
Stock option expense	1.1		1.7		4.4
Total share-based compensation expense	$	17.3	$	30.5	$	19.3

As of December 31, 2023, there was $1.0 million, $21.0 million and $1.9 million of unrecognized compensation cost related to unvested stock options, RSUs and PSU’s, respectively. The remaining costs are expected to be recognized over a period of approximately three years for unvested stock options and four years for RSUs and PSUs.

Performance-Based Restricted Stock Units

The fair value of the PSUs is estimated on the date of grant using a Monte Carlo simulation with Geometric Brownian Motion that uses certain inputs, assumptions and estimates, as follows: expected term of approximately five years, based on the contractual term of the PSUs; risk-free interest rate of 4.06%, based on U.S. Constant Maturity Yield Curve over a similar term; dividend rate of 0.0%, based on our historical and expected future dividend payouts; and volatility of 76%, and other factors.

The following table provides other key terms of the PSUs:



Performance-Based Restricted Stock Units	Stock Price Goals		Shares Issued	Grant Date Fair Value per Share
	(in millions, except per share amounts)
Tranches:
Tranche 1	$	16.76	—	$	7.69
Tranche 2	25.14		0.1	6.70
Tranche 3	33.52		0.1	5.87
Tranche 4	41.90		0.2	5.10
			0.4

Restricted Stock Units and Performance-Based Restricted Stock Units

A summary of RSU and PSU activity for the years ended December 31, 2023 and 2022 is as follows:


Restricted Stock Units and Performance-Based Restricted Stock Units	Number of Shares	Weighted-Average Grant Date Fair Value per Share		Aggregate Intrinsic Value
	(in millions, except per share amounts)
Nonvested at January 1, 2022	0.5	$	162.36	$	27.4
Granted	1.1	31.34
Vested	(0.1)	135.25		3.3
Forfeited, expired or canceled	(0.4)	81.38
Nonvested at December 31, 2022	1.1	$	51.81	$	5.0
Granted	1.6	6.67
Vested	(0.6)	50.53		3.4
Forfeited, expired or canceled	(0.2)	51.90
Nonvested at December 31, 2023	1.9	$	14.47	$	20.3

Stock Options

A summary of option activity for the years ended December 31, 2023 and 2022 is as follows:


Options	Number of Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value
	(in millions, except exercise price and term amounts)
Outstanding at January 1, 2022	0.4	$	42.48	6.12	$	9.5
Granted	—	21.42
Exercised	(0.1)	6.60			1.9
Forfeited, expired or canceled	(0.1)	83.89
Outstanding at December 31, 2022	0.2	$	38.15	5.63	$	0.2
Granted	—	8.94
Exercised	—	—			—
Forfeited, expired or canceled	(0.1)	44.88
Outstanding at December 31, 2023	0.1	$	33.68	4.29	$	0.5

A summary of total options outstanding and exercisable at December 31, 2023:


	Options Outstanding and Exercisable
Options	Number of Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in Years)
	(in millions, except exercise price and term amounts)
Range of Exercise Prices:
$0.60 - $21.42	0.1	$	5.05	3.61
$21.42 - $130.50	—	$	67.76	5.30
$130.50 - $231.66	—	$	148.88	6.33

The 2020 and 2015 Plans permit the optionee to early exercise options to obtain preferred tax treatment before the completion of the award’s requisite service or vesting period. If the employee terminates employment before the end of this period, the 2020 and 2015 Plans allow us to repurchase the shares, at our option, at the exercise price of the award. The repurchase feature is used to incentivize the employee to remain through the requisite service or vesting period to receive the full economic benefit of the award. As of December 31, 2023 and 2022, share repurchase obligations were immaterial to our consolidated financial statements.

LEASES (Tables)

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Schedule of Lease Cost

The following table summarizes supplemental balance sheets information related to leases at December 31, 2023 and 2022:


	2023		2022
	(dollars in millions)
Operating leases:
Operating lease liabilities	$	8.2	$	10.5
Operating lease right-of-use assets	$	3.5	$	4.3

The components of lease costs for the years ended December 31, 2023, 2022 and 2021 are as follows:


	For the Years Ended December 31,
	2023		2022		2021
	(dollars in millions)
Lease cost components:
Operating lease costs(1)	$	1.8	$	2.1	$	5.0

______________

(1) Variable lease expense and short-term lease expense recognized during the years ended December 31, 2023, 2022, and 2021 were immaterial.

Supplemental cash flow information for the years ended December 31, 2023, 2022 and 2021 are as follows:


	For the Years Ended December 31,
	2023		2022		2021
	(dollars in millions)
Operating cash flows paid for amounts included in the measurement of lease liabilities	$	3.2	$	3.9	$	3.8

The weighted average remaining lease term and weighted average operating lease discount rate, as of December 31, 2023 and 2022 are as follows:


	2023		2022
Weighted average of remaining operating lease term (years)	3.8		4.6
Weighted average operating lease discount rate	11.8	%	11.8	%

Schedule of Future Lease Payments

Future lease payments as of December 31, 2023 were as follows:


	Operating Leases
	(dollars in millions)
2024	$	3.0
2025	2.2
2026	2.3
2027	2.4
2028	0.2
2029 and thereafter	—
Total future lease payments	10.1
Less: imputed interest	(1.9)
Total lease liabilities	$	8.2