Mike hit on the best perk of AAA: maps and tour books for everything. Before every roadtrip I walk out with about 60$ in free maps and, in my experience, they never fuss about hooking you up. The highly underutilized camping books and maps are amazing.

They're handy to have around for other things too. Out of gas, locked the keys in the car, need a jump start, flat tire repair...the list goes on. I don't know about the alternatives (roadside asst. thru insurance or car companies, BWC, etc) but AAA's been good and usually very timely and reasonably courteous.

I've had AAA through my family for quite a while, and I think it's worth it. I should say, though, that my family typically drives cars until they are no longer capable of moving under their own power, or fail state inspection, so we always had a car that was on it's last legs. We mainly used them for the towing back to our main mechanic/garage. Most towing places charge you some fee to come out there, than so much per mile. With AAA, they covered nearly all of that fee, and the first 10 miles or so. We would have to pay the tow truck guy a token $5, or something, but that was it. We broke even cost-wise after the first tow.

If your car is newer and reliable, than it probably isn't as good a deal for just the towing. They do offer free maps, guidebooks, and all kinds of other free stuff that's been mentioned, which can really help out if you're taking a trip to an unfamiliar area.

Lastly, most hotels offer a AAA discount. Depending on how expensive the hotel is, the savings can cover the cost of the membership in a night or two. And those guidebooks tell you which hotels offer the discount.

It's also worth saying again that AAA covers you, no matter what car you are in.

The additional perks are not what they used to be as you can often find similar, sometimes better, discounts on the web. But I still think the roadside assistance is worth the value.

I get way more than the annual rate back in AAA discounts for my glasses and hotel.
With my glasses alone I save $150. With hotel, usually $20-30 per night.
My annual fee is $63
I also do well the piece of mind (supposedly) if I was locked out or broken down somewhere.

I called my auto insurance and found that they'd offer a free roadside assistance, unlocking a car, etc. once annually for free! Since I also get student and military discounts at various places, AAA wasn't worth it for me.

I believe that is why your AAA account won't be activated for 10 days or so after you sign up.

I've used it a few times for towing and get their maps and tour guides. Occassionally, I'll use it for a discount. I have the plus membership that can tow anywhere up to 100 miles, it's not cheap, but it's worth the peace of mind.

I've been a AAA member for 10 years, and it has been totally worth it for me. I've used the tows numerous times, and on my last vaca I had to call because I locked the keys in my rental car.

Wow, I'm surprised at the number of people here singing the praises of AAA.

I'm not a member and never have been, and I don't really see what I'm missing. Many of the stories I've read in this thread seem either far-fetched, or overblown.

I mean, honestly, how often do you lock your keys in your car? I've never done it with any of my cars. In fact, it seems like something that would be difficult to do with any car with keyless entry. If I open the driver door to get out, then press the "lock" button while the driver's door is still open, the driver door does not lock. You have to press the button on the fob once outside the car, with the driver door closed, in order for it to lock.

If you have an older car without electronic locks and keyless entry, and are really worried about it, why not just make a copy of your door key and keep it in your purse/wallet? Total cost: $3.50. Never be locked out again.

Run out of gas? That's an easy one to avoid.

Flat tire on the highway? Isn't that what spare tires are for? Is it really that much of a hardship to change a tire on those incredibly rare occasions when you get a flat?

As for maps, a portable refurb GPS unit can be had for $150 or so - the cost of 3 years of AAA membership.

I guess I just don't see what the attraction is. It seems like an obsolete organization that caters to lazy or inept people. What am I missing?

Of course, once in a while, your car breaks down on the side of the road. A tow costs around $50. That's the same cost as 1 year of AAA membership. So if your car breaks down more than once a year, I suppose it's worth it. But seriously - who among you requires more than 1 tow per year?

True, each individual use of AAA membership does not recover the cost. But one lockout and one flat tire can make it worth while. A refurb GPS costs about the same as three years of AAA, in which time you will have had to upgrade the mapping software for the cost of at least another year's membership. Keeping a spare key in your purse is all well and good assuming you A) carry the same purse at all times and B) don't lock the purse in the car. Yeah, it's rare, but it happens. My house doesn't burn down regularly, but I still carry insurance. I also find it much more comforting to know that if I get a flat on a rainy night on the interstate, I can get help changing it, from someone with proper tools, and a truck with warning lights. Yes, I can change my own tire, but right now my (8 months pregnant) wife cannot. So, maybe it makes me "lazy or inept" but I find it worth the money.

Yes, per year. You would have to have those kind of emergencies once per year to make it worthwhile. I don't believe that's a normal frequency for the average motorist.



Not necessarily. We haven't updated our GPS in 3 years and it still works fine. Realistically, how often do roads change?



Admittedly, it's less convenient for women. I carry my wallet with me all the time, so a key in my wallet would be constantly accessible to me. I can see how it would be less of an assurance for women, though.



I do too, but only because it's required by my mortgage company (they want to ensure that if it burns down, they still get paid). Once the house is paid off and insurance is no longer required, I will cancel it. Mathematically, it makes more sense to save the money yourself.



I can understand that. However, I very rarely find myself on interstates during rainy nights. Much more often, I'm on city streets during clear days. Thus, statistically, that is the time I'm more likely to experience a blown tire, if it's going to happen. It would be an extremely bad coincidence if my tire were to go flat on the rare occasions I find myself on an interstate, at night, in the rain. I'm willing to take that chance.

Well, yea that's how insurance works. The premium over time will likely exceed the cost of any loss.




Although I agree with you: I self-insure any services AAA would provide me.

...

I can't speak to the math side of things, but from a family point of view I can't think of anything short of a death or serious illness that would be more devastating than losing our house with no insurance. A new roof, sure, it would hurt but with the emergency fund could cope. A burnt-down house though ...

Do you have any figures for the math side you referenced? I'd guess you'd need all the probabilities for the various types of incidents, then weigh these over time versus the insurance costs etc etc.

Are there any readers out there that have decided to forgo their home insurance?

cheers,
Zulu

I've used their services so many times and found it to be worth it every time. I'm now waiting between renewals unless there are things that the card will greatly benefit me for (none yet). I will sign up when I get locked out or a flat tire. The value of the plan cost versus my use has more than quadrupled the savings I would normally have wasted on towing insurance and other services.

As far as canceling homeowners insurance, if you feel that the amount you would save in homeowners insurance each month would add up to enough to rebuild a house and replace your possessions, by all means do it. If you cannot afford to replace your house or possessions- I'd keep the plan, but shop around for a better rate.

Have a great day.

Jenny

Do you carry any insurance? The entire model for that business is such that the premiums you pay will be less than the average total in claims.

Therefore by that logic, no insurance is worth it.

I disagree.

Mathematically it may make sense to forgo insurance for the greater expected value of saving the money yourself, but alongside that you will have to accept the risk of ruin with not being covered.

Professional poker players deal with this problem daily, they may have an edge to play in a game they're not bankrolled for, therefore while their +EV would be high it also comes with a very high risk of ruin.

To provide a better example, in a poker game getting your money in with cards to come as a 70% favorite is a HUGE advantage. If you knew you could place a bet with these odds, how much money would you wager? Since you have a mathematical edge, the route with the most expected value would be to bet all of your worth. This will net the most amount of money when the simulation is ran to infinity. The problem is obvious in this case, as if you bet 100% of your worth you would have a 30% chance of losing everything, a devastating result.

If you could take the same bet an unlimited amount of times then yes, I would bet 100% of my worth in this situation. But instead I would diversity my risk by betting tiny increments of money on each individual case. This would net the exact same expected value but significantly lower the variance.

So once again the correct decision would come back to the amount of risk you're willing to assume, and whether or not you're "bankrolled" for the associated variance while lacking insurance.

To move back into a real life example, say you have a 1% chance of losing your house, but would still be responsible for the mortgage. Is that an acceptable risk? If you already answered the question then you're wrong. 1% chance over what period of time, and is it repeating? Would be the proper response. For most people, this situation would be absolutely devastating to their family. It would break them. What happens now? The average family does not have the capacity to recover from such a loss without public assistance. In an ideal situation, this family would have a modest mortgage that consists of less than 25% of their take home pay (sound familiar?), and they would be able to shoulder two mortgages to term. Great!

But what about the families that fall victim to the 1% chance, twice. They're destroyed, should they be left to starve? No, the government picks up the tab because letting them suffer is not ethical.

The alternative is if the risk of losing their home is spread out evenly over everyone. Instead of 1 in 100 families being screwed, now all 100 families incur an insignificant 1% of the value of their home cost, and they no longer have to worry about this devastating scenario.

This is what insurance is all about, diversifying risk.

When in balance, I think it is a very good thing. Out of balance at one end of the spectrum is insurance companies making millions of dollar for profits, and at the other end is our government taxes not nearly covering the spending we do leading to our increasingly scary national debt.

Overall for a society I think insurance is a good thing. While I don't necessarily think our implementation is that great, the alternative world (one without insurance) is a much worse place to live in. Think of the increasing crime rates when desperate get screwed by their 1% chance.