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Sandi Lilly
Sandi Lilly, Attorney
Category: Business Law
Satisfied Customers: 4
Experience:  6 years practising law, 20+ as paralegal before that;law firm and in-house experience. UCC savvy
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Why isnt AAA considered insurance? They are considered an

Customer Question

Why isn't AAA considered insurance? They are considered an auto club. What is the difference. You are paying an annual fee for coverage.
Submitted: 7 years ago.
Category: Business Law
Expert:  Ellen replied 7 years ago.

Hello,


Thank you for your question. I am happy to assist you.


AAA is a club that permits members to obtain insurance from certain insurance carriers because they are club members. AAA does not provide insurance. Instead AAA negotiates plans and fees for policies that are available only for AAA members.


I hope that the information which I provided was helpful to you.


Best wishes for a successful outcome. If you have additional questions, please do not hesitate to submit them to me directly.


Thank you,
Customer/span>



THIS IS FOR INFORMATION ONLY. NO ATTORNEY-CLIENT RELATIONSHIP EXISTS. PLEASE CONSULT A LAWYER IN YOUR STATE FOR LEGAL ADVICE

Customer: replied 7 years ago.
What about the AAA card that I have? I pay an annual fee in case my car doesn't start and it covers for someone to come out and tow my car in case of an emergency.
Expert:  Ellen replied 7 years ago.
Hello,


I am aware of that.


You are paying a membership fee which provides a towing and roadside assistance benefit to its members.

However, that is only a small part of what AAA provides. It provides membership discounts and ability to obtain member rates at participating vendors, including insurers.


I hope that this helps.


Thank you,
Customer/span>



THIS IS FOR INFORMATION ONLY. NO ATTORNEY-CLIENT RELATIONSHIP EXISTS. PLEASE CONSULT A LAWYER IN YOUR STATE FOR LEGAL ADVICE

Expert:  Sandi Lilly replied 7 years ago.
Under MD Code, Insurance Sec. 26-101(f)(g) AAA falls into the definition of a motor club, regulated under the insurance code. It parallels more traditional "insurances" like life and health in that you are paying a "fee" or premium in exchange for certain services that are covered thereunder.
Sandi Lilly, Attorney
Category: Business Law
Satisfied Customers: 4
Experience: 6 years practising law, 20+ as paralegal before that;law firm and in-house experience. UCC savvy
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