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Overview
AARP stands for the American Association of Retired Persons. AARP lobbies Congress on issues crucial to retirees and older Americans. Many people over the age of 50, both retired and working, join for a membership fee of less than $15 a year. AARP also offers auto insurance for seniors.
Requirements
AARP auto insurance is offered through The Hartford Financial Services Group, Inc. To qualify for the auto insurance program, you need to be at least 50 years old. You must have a valid driving license, and be in good mental and physical health to drive a car. Your driving record should not include any convictions for DUIs or DWIs.
Benefits
Many AARP members buy this insurance coverage because of its many benefits. First, if you pay your premiums on time and keep your account in good standing, you are eligible for lifetime renewal of your coverage after your first 2 months of coverage in most states. Secondly, if your new car is totaled within 15 months or 15,000 miles of purchase, Hartford will pay the entire replacement cost for an identical car. No depreciation costs are subtracted. Third, your rates are locked in annually so your insurance rates cannot be raised every 6 months.
You also have several options for customizing your auto insurance plan with more or less coverage. The program also offers several options for paying your bill and a 24/7 phone hot line for claims. It also offers special coverage options for classic or antique automobiles, and special discounts if you also add insurance coverage for your house or condo.
Considerations
However, despite these benefits, many people also feel that AARP's auto insurance is not a good deal. AARP members assume that it negotiated the best rate for their insurance coverage because of their members' collective buying power. However, according to a Bloomberg.com December 2008 article, many health and auto insurance companies pay millions of dollars each year to obtain lucrative endorsements from AARP.
Costs
Individual AARP members pay extra fees when they purchase auto insurance. Hartford sends a portion of the premium costs to AARP directly. These extra fees help pay for AARP's extensive lobbying and promotional expenses. These royalties can sometimes almost double the price of an member's auto insurance premium.
Expert Insight
Since many retirees live on a fixed income, it is essential that they find the best rate. Seniors should call several insurance companies and compare coverage and costs before signing up for any program. They should ask questions about any extra fees or costs added to their insurance premium. Also, they should keep an eye out for any price increases after the first year of coverage.
