Logan Shaw wrote:
> The Real Bev wrote:
>
>> I doubt if the tow-jockey cares where you bought your membership --
>> otherwise
>> you'd play hell getting a tow in an expensive area if you'd bought your
>> membership in a cheap area.
>
>
> Call me crazy, but I don't quite get why it's worthwhile to buy
> insurance for this in the first place.


Because there is a single point of contact. If you were 75 miles from
home and your car stopped on the Interstate who would you call? AAA has
negotiated contracts and service level agreements with providers and
they know exactly who to call.

>
> At the worst, I can imagine needing a tow perhaps twice a year, and
> that would be in a bad year. Given that it costs about $125 for a
> tow, I'm not sure how it's a catastrophe to have to pay for it yourself.
>

It isn't financial. If I compared the difference (from memory) it is
probably a wash.




> More to the point, unless the insurance company is negotiating special
> rates with tow truck companies (which, I admit, is possible), they are
> paying the same rates as you and yet making money despite all their
> overhead. Therefore, on average you should expect to pay less if you
> simply pay the costs yourself on the rare occasion that it's necessary.

The service providers work on an negotiated rate schedule which you
aren't going to get.



>
> To put it another way, the purpose of insurance is not to get free
> stuff: it never works that way, because the insurance company makes
> a profit, and you must therefore wind up paying more *on* *average*.
> The purpose of insurance is instead to protect you from large expenses
> that could damage your financial stability or at least throw you off.
> I just don't see how having to pay $125 typically less than once a
> year can threaten to throw anyone off all that much.
>
> All in all, if I had to choose between the two, I'd much rather have
> insurance for the repairs themselves. You can bet that after you
> spend that $125 to be towed to a shop, the repair bill is going to
> come to a lot more than $125 most of the time. Seems to me that's
> the type of unexpected expense to protect yourself from. Not that
> I'm aware of a company that offers this type of insurance, but it
> does seem more desirable.
>
> - Logan