Why Is AAA Insurance So Expensive? Examining the Top Reasons

AAA is a well-known auto club that provides roadside assistance, travel planning, discounts, and insurance services. While AAA auto insurance tends to cost more than many other popular insurers, there are some valid reasons for the higher rates.

Below we’ll explore why AAA premiums are expensive on average and what factors cause costs to rise:

AAA Insurance Rates Are Above Average

On average, a full coverage AAA insurance policy costs about 42% more than the national average premium.

For example, a typical married 35-year-old driver would pay:

• $2,856 per year with AAA

• $2,008 per year nationally

Several factors contribute to AAA’s above-average auto insurance costs:

Regional Club Model

• AAA is not one national insurer, but a collection of independent regional auto clubs

• Each local AAA club partners with different insurance carriers to provide policies

• This fragmented structure makes consistency in pricing difficult

Higher Risk

• Some AAA clubs operate in areas with higher accident rates and loss costs

• Urban regions like Los Angeles see more claims, leading to expensive premiums

Brand Power

• Strong name recognition allows AAA to charge slightly higher rates in many markets

While AAA is one of the more expensive options on average, it offers competitive pricing in certain states and situations. Drivers should always compare quotes.

Factors That Increase Your AAA Insurance Costs

AAA premiums can get expensive based on your unique driver profile and coverage selections. Here are some of the main factors that raise your costs:

Young Drivers

Teenage drivers pay an average of $2,608 per year with AAA, compared to $529 for older adults. Due to inexperience, teen rates are high with all insurers.

Recent Accident

AAA rates go up 24% on average after a driver causes an accident. Higher risk means higher insurance prices.

Full Coverage

Choosing extra coverages like collision and comprehensive makes your policy more expensive than just basic liability.

Poor Credit

Drivers with low credit-based insurance scores pay more for AAA coverage on average.

High-Risk ZIP Code

AAA will factor in accident rates, crime, and claims costs in your area when pricing policies. Some regions have pricier premiums.

Expensive Vehicle

Insuring a luxury or sports car costs more due to higher repair expenses and theft risk.

As you can see, many common driver and vehicle factors influence what you’ll pay with AAA. Your personal profile and choices determine if rates are affordable or not.

How To Save on AAA Insurance

While AAA premiums might seem expensive upfront, you may be able to reduce your costs. Consider these money-saving steps:

Review Discounts

Take advantage of every AAA discount you qualify for. Common options include:

• Multi-policy (for bundling home or life with auto)

• Multi-vehicle

• Loyalty/tenure

• Student

• Defensive driver

• AAA membership

Ask your agent for a full list of discounts in your state. Even 10% off can provide big savings over time.

Adjust Deductibles

Opting for higher collision and comprehensive deductibles lowers premiums. Just be sure you can afford the out-of-pocket cost if you need to file a claim.

Reduce Coverage

Dropping comprehensive and collision (not advised) or choosing lower limits can cut costs substantially. But it leaves you exposed to more risk.

Improve Credit

Work on increasing your credit-based insurance score before policy renewal for lower AAA rates.

Review Options

Regularly compare AAA quotes with other top insurers to make sure you have the best deal. Their algorithms differ, so one may offer you cheaper rates.

With smart strategies, you can reduce expensive AAA premiums. But avoid simply choosing minimum coverage to save money, as you’ll regret it after an at-fault accident.

Is AAA More Expensive for Young Drivers?

Yes, AAA car insurance tends to be very expensive for teen drivers compared to adults:

• Teens pay an average of $2,608 per year with AAA

• Adult drivers average just $529 per year

There are a few reasons why AAA insurance costs so much more for teens:

• Teen crash rate is 4 times higher than older drivers

• AAA factors driver experience heavily into premium calculations

• All insurers view young drivers as high risk, so teen rates are elevated industry-wide

• Full coverage required for teen drivers adds to costs

To save, teens should take AAA’s driver training discount, maintain good grades, drive safely, and compare rates regularly as they get experience. Rates drop significantly once teens move into the adult pricing at around age 25.

Is AAA Insurance Worth the High Cost?

Whether expensive AAA premiums are “worth it” depends on your situation:

AAA Might Be Worth Higher Cost If:

• You qualify for multiple discounts to reduce the rate

• You want excellent roadside assistance coverage

• You value bundling home or life insurance with auto

• You have a long history as a AAA member

• AAA offers the best rate after comparing quotes

AAA Might NOT Be Worth Higher Cost If:

• You can find much cheaper full coverage elsewhere

• You don’t need add-ons like premier roadside assistance

• You don’t qualify for discounts to offset high base rates

• You have factors like an accident that make AAA very expensive

• You are a teen or other high-risk driver

Drivers who only need basic liability coverage can likely find cheaper options than AAA’s higher rates. But AAA can be competitive for some demographics and worth paying more for the convenience, benefits, and excellent financial strength.

Is It Easy to Get AAA Insurance Quotes?

Getting AAA insurance quotes is straightforward, either online or through a local agent.

To Get AAA Quotes Online:

• Visit the AAA website and find your regional club

• Click on “Get a Quote” and choose auto insurance

• Enter your basic personal and vehicle details

• Select desired coverages and coverage amounts

• AAA provides estimated premium rates based on the details provided

To Get AAA Quotes From an Agent:

• Find your local AAA office using the club locator

• Call or visit an agent and explain you want a car insurance quote

• Provide information on all household drivers and vehicles

• Discuss options like bundling home insurance

• The agent will use your details to produce customized AAA quote options

AAA makes it simple to get quotes through whichever channel you prefer. Make sure to compare their rates with other top insurers as well.

The Bottom Line

While premiums are expensive relative to competitors, AAA remains a strong insurance choice for many drivers who can take advantage of its benefits and discounts.

Weigh your options carefully if you find AAA unaffordable. Reducing key coverages like collision or uninsured motorist to save money can be risky. Often, you can find another insurer that offers full protection at a better price.

Use online quotes and an independent insurance agent to explore both AAA and alternatives rates in your area. Find the optimal balance of value, quality service, and price. Don’t overpay, but don’t sacrifice important coverage to save either.