Why is AAA Insurance So Expensive? Here Are 8 Reasons

Why is AAA insurance so expensive?
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    Are you wondering why your AAA insurance is becoming too expensive? Several factors like age/gender, changes in coverage, and driving record could be directly contributing to the exorbitant cost of your AAA auto insurance premium.

    For example, AAA rates for a male teen driver is about $550 dollars compared to the $150 charged for a female teen driver. Its average rate of $1,958 per annum makes it one of the most expensive auto insurance companies in the US.

    We shall take a look at how AAA insurance racks up against other top insurance companies.

    Insurance Company Average Annual Rate
    Allstate$2,135
    Farmers $2,078
    State Farm$1,279
    Geico$1,250
    American Family$1,383
    AAA1,958
    Nationwide$1,473
    Progressive$1,40
    USAA$1,022
    Travelers$1,355
    All rates sourced from US News

    Related: How to Cancel AAA Insurance (Quick Steps)

    Why is AAA insurance expensive?

    Auto insurance is generally high irrespective of the insurer you enroll with. But sometimes conditions could make you pay more premium fees for your insurance coverage.

    Here are some of these conditions:

    Driving Record

    One of the most significant factors affecting insurance premiums is your driving record. If you’ve been involved in accidents, received traffic tickets, or have a history of moving violations, you may be considered a higher-risk driver and this could cause you to pay higher rates.

    Age/gender

    Younger drivers often pay higher premiums due to their lack of driving experience, while older drivers might see increases as they get into higher-risk age groups. In addition, female teen drivers tend to pay less than male teen drivers.

    Changes in Coverage

    Since more coverage typically means higher costs, when you increase your coverage limits or probably add additional coverage, this can lead to higher premiums thus, increasing your overall policy fee.

    Credit Score

    If you have a better credit-based insurance score, you’ll typically qualify for lower rates.

    Deductibles

    If you choose a lower deductible for your insurance, it means that in case of a claim, the company will cover a larger portion of the costs. However, this also means that you will have to pay higher premiums.

    Related: AAA Dental Insurance Coverage For Massachusetts & Rhode Island

    Discounts

    When you don’t qualify for various discounts, such as safe driver discounts, multi-policy discounts, or discounts for completing defensive driving courses, this can always result in higher premiums.

    Vehicle type

    The make, model, and age of your vehicle can greatly impact insurance costs. High-end cars, sports cars, and vehicles mean expensive repair costs. And since they are more expensive to repair and replace, they usually come with higher insurance rates.

    Market Conditions

    Like every other insurance company, AAA operates in a competitive market. So if the insurance company faces higher-than-expected claims across its policyholders, it might need to raise rates to cover its costs.

    Related: In-House Financing Car Lots: Here’s All You Need To Get Started

    Frequently Asked Questions (FAQs)

    How much is AAA car insurance per month?

    AAA car insurance rate is $192 per month and $1,958 per annum.

    Is AAA car insurance good?

    Yes. As an old name in the car insurance business, AAA is a reputable brand that provides auto, home, travel, vehicle assistance, dental insurance, etc. in many states across the US.

    Can policyholders switch insurance companies to avoid premium increases?

    It’s possible for policyholders to change their insurance provider if they come across better rates elsewhere. Nevertheless, it’s crucial to keep in mind that a prior record of claims or violations may still influence the premium of the newly selected policy.

    Can policyholders do anything to prevent premium increases?

    Maintaining a safe driving record, avoiding traffic violations, and practicing responsible driving behaviors can help prevent premium increases. Additionally, some insurance companies offer discounts for safe driving courses or using telematics devices that monitor driving habits.

    However, certain factors like age or gender could mean you can’t do anything to influence the rate of your premium policy.

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