Some members may be paying as much as double for AARP-backed insurance versus what they would pay under another plan. Why would AARP steer them so wrong? Part of the premium people pay for their car insurance goes to AARP as “royalties” and “fees.” This means that AARP takes a cut of every payment before the insurer gets paid anything, and with AARP’s enormous membership base, that’s a lucrative business.
These “fees” have jumped from accounting for 11% of AARP’s revenue back in 1999 to being 43% in 2007. Intentionally coaxing members to pay more for their insurance to reap financial awards? “Shady” actually seems like too nice a word.