Why Is Nationwide Auto Insurance Cheaper Than Aaa?

When it comes to auto insurance, there are many options to choose from. Two of the most well-known companies are Nationwide and AAA. Both companies offer a range of insurance products and have been in the industry for several years. However, there are some key differences between the two. Nationwide is a newer company that offers lower rates on average and has superior customer service ratings compared to AAA. On the other hand, AAA is an established member club that provides various benefits, including roadside assistance and travel services, in addition to insurance. It's important to consider your own needs and preferences when choosing between Nationwide and AAA auto insurance. By comparing quotes and researching the features of each company, you can make an informed decision that best suits your requirements.

Discounts and additional coverage options

Nationwide Discounts

Nationwide offers several ways for customers to save on their auto insurance premiums. Here are some of the key discounts available:

• Multi-Policy Discount: Customers who bundle their home and auto insurance with Nationwide can save an average of $646 per year.
• SmartRide Discount: Customers can save 10% just for signing up for Nationwide's usage-based insurance program, with the potential for up to 40% savings for safe driving.
• SmartMiles Discount: Designed for low-mileage drivers, this program offers flexible monthly payments based on the number of miles driven, resulting in potential savings for those who drive less.
• Accident-Free Discount: Drivers with at least five years of accident-free and violation-free experience may be eligible for up to a 10% discount.
• Good Student Discount: Drivers between 16 and 24 years old who maintain a B average or higher are eligible for a discount.
• Defensive Driving Discount: Older drivers who complete a state-certified defensive driving course may receive a discount of about 5%.
• Anti-Theft Discount: Discounts are offered for vehicles equipped with certain factory-installed or after-market anti-theft devices.
• Safe Driver Discount: Customers with five years of safe driving history, free from accidents and moving violations, may be eligible for lower premiums.
• EasyPay Discount: A one-time discount is offered when customers set up automatic deductions from their bank account.
• Paperless Discount: Customers may receive a recurring discount when they choose to receive policy communications via email.
• Affinity Member Discount: Nationwide partners with various organizations, and customers affiliated with these partners can receive a discount.

AAA Discounts

AAA also provides a range of discounts for its auto insurance customers. Here are some of the key discounts available:

• Paperless and Automatic Payments Discount: Policyholders in certain states can save money by receiving their policy online or by enrolling in automatic payments.
• Multi-Policy Discount: Bundling home and auto insurance with AAA can result in savings on both policies.
• SmartMiles Discount: AAA's usage-based insurance plan offers potential savings for infrequent drivers based on their annual mileage.
• AAA Member Discount: AAA membership for towing services also provides discounts on travel, dining, and more, depending on the package level.
• Advanced Shopping Discount: Drivers who switch to AAA and obtain a quote at least seven days before the policy's start date may be eligible for a discount.
• Driver Training Discount: Young drivers who complete AAA's Auto Club Driving School program may receive an additional discount.

Additional Coverage Options

In addition to discounts, Nationwide and AAA offer various additional coverage options and benefits.

Nationwide Additional Coverage Options

• Roadside Assistance: Nationwide offers roadside assistance services such as towing, fuel delivery, and more.
• Vanishing Deductible Program: This optional program lowers your deductible by up to $500 for each year you go without making a claim.
• Accident Forgiveness: Nationwide does not increase premiums just because a claim is filed.
• Telematics Programs: Nationwide offers two telematics programs, SmartRide and SmartMiles, that can help measure driving habits and provide potential discounts.
• Homeowners Insurance: Nationwide offers homeowners insurance in 45 states and Washington, D.C., with competitive rates and various discounts.

AAA Additional Coverage Options

• Bundling Options: AAA provides numerous bundling options, allowing customers to combine their auto insurance with other types of insurance or membership perks.
• Roadside Assistance: AAA is well-known for its extensive roadside assistance services, including towing, stuck vehicle services, and trip interruption coverage.
• Telematics Program: AAADrive is AAA's telematics program, which analyzes driving habits and offers potential discounts.
• Homeowners Insurance: AAA offers homeowners insurance through affiliated insurers, providing coverage in all 50 states with competitive rates and discounts.

Customer satisfaction and experience

Nationwide Customer Satisfaction and Experience:

Nationwide has received mixed reviews when it comes to customer satisfaction and experience. On one hand, Nationwide has been praised for its affordable rates, discount options, and wide range of coverage options. They offer multiple telematics options, such as SmartRide and SmartMiles, which can help safe drivers and low-mileage drivers save money, respectively. Additionally, Nationwide has a strong presence in the home insurance space and offers competitive rates.

However, Nationwide has also faced criticism for its overall customer experience. According to J.D. Power studies, Nationwide scores below average in claims satisfaction and customer satisfaction in most regions. Their app functionality has also been rated poorly, with limited features related to insurance. The National Association of Insurance Commissioners (NAIC) report shows that Nationwide has received fewer customer complaints than other auto insurers of similar size, indicating that policyholders may be relatively satisfied with the service.

AAA Customer Satisfaction and Experience:

AAA, also known as the American Automobile Association, has a regional club presence and offers insurance through partner companies. As a result, the customer experience can vary significantly depending on the region and the specific AAA club. AAA is known for its well-established company history and the various perks and discount opportunities that come with membership. Their customer service has been described as "top-notch," with positive reviews highlighting the ease of filing claims and the helpfulness of representatives.

However, AAA has also received negative reviews, with some customers expressing dissatisfaction with unexpected rate increases, cancellation issues, and poor customer service. The J.D. Power Auto Claims Satisfaction Study gives AAA a mixed rating, with some clubs scoring above the segment average and others scoring far below. The NAIC report shows that AAA's customer complaint ratio varies by club, with some clubs receiving fewer complaints than expected, while others have higher-than-average complaint ratios.

Company history and reputation

AAA

The American Automobile Association (AAA), commonly pronounced as "Triple A", was founded on March 4, 1902, in Chicago, Illinois, by nine motor clubs with a total of 1,500 members. The Automobile Club of Buffalo joined in 1903. AAA was established in response to a lack of roads and highways suitable for automobiles. The organisation advocated for the building of a cross-country highway and published its first road maps in 1905. AAA began printing hotel guides in 1917 and introduced roadside assistance in 1915.

AAA has a long history of involvement in traffic safety and education. In 1920, it established the School Safety Patrol Program, the first of its driver safety programs. AAA also introduced traffic safety education in elementary and junior high schools and pioneered driver education in high schools. In 1935, AAA published Sportsmanlike Driving, the first course outline for high school teachers, and in 1936, it published the first driver education curriculum for use in high schools.

AAA has also been involved in government and legislative affairs, particularly around issues that affect motorists. For example, it supported Virginia's now-repealed traffic citation tax and the since-repealed National Maximum Speed Limit of 55 mph. AAA has also lobbied in favour of red light and speed cameras in some states.

AAA is a privately held not-for-profit national member association and service organization with over 60 million members in the United States and Canada. It is a federation of motor clubs, with 42 individual clubs across North America. AAA provides services to its members, including roadside assistance, travel planning, and discounts.

Nationwide

Nationwide was founded in 1926 as the Farm Bureau Mutual Automobile Insurance Company. Initially geared towards farmers, the company has grown into one of the largest insurance and financial services companies in the world. Today, it is a Fortune 100 company that offers a full range of insurance and financial services across the country, including car, motorcycle, homeowners, pet, farm, life, and commercial insurance, as well as annuities, mutual funds, retirement plans, and specialty health services.

Nationwide has a reputation for offering relatively low-cost car insurance rates across the board for many types of driving records and driver ages. It also provides many add-on coverage options, such as accident forgiveness, gap insurance, new car replacement, and vanishing deductible. The level of complaints against Nationwide for auto insurance is low, and it has received a C grade from collision repair professionals.

Nationwide is available in 46 states and Washington, D.C., but is not available in Alaska, Hawaii, Louisiana, or Massachusetts.

Financial strength and stability

When it comes to financial strength and stability, both Nationwide and AAA are reputable and established insurance companies with a long history of operations.

Nationwide has been in business for over nine decades and has a strong capital position. In 2023, their total investments were $139.3 billion, and they reported a net investment income of $5.7 billion, an increase from the previous year. They are a FORTUNE 100 company and offer a diverse range of financial and insurance products. Their financial ratings from 2024 include an A+ rating, the fifth-highest of 21 ratings, and an A rating, the third-highest of 16 ratings.

AAA, on the other hand, was founded in 1902 and is a well-known name in the insurance industry. They are a not-for-profit membership organization offering insurance options, roadside assistance, and travel planning services. While AAA's insurance policies are only available to members, they have a large customer base. AAA is divided into different regional clubs, and the insurance is provided by separate, regional insurance companies that operate under the AAA name. The Automobile Club of Southern California is the largest AAA club, with 1.53% of the market share and $4.8 billion in direct written premiums. AAA's financial ratings vary by region and club, with some clubs scoring above the segment average in J.D. Power studies, while others score below average.

When comparing the two companies, Nationwide generally offers lower average rates for full coverage, while AAA has slightly lower average rates for minimum coverage. However, it's important to note that rates can vary based on factors such as age, driving record, and credit score. Overall, Nationwide has cheaper car insurance rates than AAA for various driver profiles, especially high-risk drivers.

Both companies have an A+ (Superior) rating from J.D. Power, indicating their ability to meet financial obligations and pay claims. This rating assesses their historical financial stability.

Insurance rates and pricing

Nationwide offers affordable rates and a broad list of coverage options, making it a competitive choice in the market. They provide standard car insurance policies with optional roadside assistance and have a wide range of insurance products, including motorcycle, snowmobile, watercraft, and homeowners insurance. Nationwide also offers various discounts, such as good student discounts, safe driver discounts, and multi-policy discounts. Their rates are particularly competitive for senior drivers and parents adding a teenage driver to their policy. Additionally, they offer optional add-ons like accident forgiveness, gap insurance, and new car replacement.

On the other hand, AAA auto insurance is available through its member clubs and partner companies. Their rates tend to be higher than Nationwide, especially for full coverage. However, AAA provides additional membership benefits and numerous discount opportunities. AAA is well-known for its roadside assistance programs, travel services, and maps. Their insurance products include auto, home, renters, and life insurance. AAA also offers discounts for bundling policies and having safety features in your vehicle.

When comparing Nationwide and AAA, it is worth considering your specific needs and preferences. Both companies have their strengths, and by evaluating factors like coverage options, discounts, and customer satisfaction ratings, you can make an informed decision about which insurer is the best fit for your requirements and budget.

Frequently asked questions