An investigation by Consumer Reports has shown that while some policies that are quoted through associations – AARP, for example – are often cheaper than rates quoted without a membership, many quotes received through associations are more expensive.
Although many people automatically assume that they will be receiving a better price by receiving a quote through their membership with an organization, alumni association, or other group, this is not always the case. There may be perks to the membership, but this does not always include cheaper insurance.
Consumer Reports gave the example of AARP Services and said that the nonprofit membership organization’s for-profit branch “collected almost $657 million in royalty revenues from the sale of insurance and other products and services in 2009.”
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This means that they are making a significant amount of money through the sale of insurance and helps to explain why obtaining insurance through membership with an organization may mean that you are paying more than you would if you were quoted elsewhere. This occurrence varied from one person to the next and from one association to another.
Founder of Money Talks News, Stacy Johnson, said that discounts for insurance rates through associations are hit-and-miss. Within the Consumer Reports investigation, one staffer from the organization was able to receive a discount of 3 percent through an association, while another tried the same thing and saw a price increase of 14 percent.
The key to making sure that you get the best insurance price is never to assume. Always shop around and compare rates on a regular basis.