Our Editorial Opinion on Costco Auto Insurance
You may know Costco for its wholesale prices and value of its food court meals, but did you know that it offers several other services to members, including auto insurance? Costco auto insurance is offered through Connect, an American Family Insurance company.
Business Insider’s personal finance team compared Costco Auto Insurance to the best car insurance companies. We found that it could be a good option for Costco members. It has high customer satisfaction ratings in some regions and generally affordable prices. It also includes complimentary benefits that competitors usually offer at an additional price.
Costco Auto Insurance Overview
Those with Costco memberships rave about its wholesale prices and the value of food court meals, but it also offers several other services to members, including auto insurance. Costco Auto Insurance is offered through Connect, which is powered by American Family Insurance. You’ll need a Costco membership to get insured, but the upside is a variety of discounts and generally affordable rates.
That said, Connect has many negative customer reviews, especially for its claims handling and customer service. Also, Costco Insurance Agency isn’t available in all regions. Currently, it doesn’t offer new auto or home insurance policies to residents of California and Florida. It also isn’t available in Alaska, Louisiana, Maine, North Dakota, or Wyoming.
Costco Auto Insurance Pros and Cons
Costco Auto Insurance Pros
- Lower-than-average premiums
- Complimentary benefits and unique perks
- Offers gap insurance and accident forgiveness
Costco Auto Insurance Cons
- Only available to Costco members
- Not available in all states
- Negative customer review
Costco Auto Insurance Plans Available
Before you consider the various types of car insurance offered by Costco, make sure you’re a member, so you’re eligible to purchase a policy.
Connect offers the following types of auto insurance coverage:
- Comprehensive coverage: Covers “out of your control” events, such as weather-related events, vandalism or theft, or hitting an animal. Comprehensive insurance includes stolen key coverage, which involves replacing the locks and waiving the deductible if it costs under $250.
- Collision coverage: Covers collisions with another vehicle or object, such as a light pole or a pothole.
- Rental car: Also known as rental reimbursement coverage, it pays up to a daily amount you select towards a rental vehicle after a covered loss.
- Bodily injury: If you injure someone in an accident and are found at fault, this can help cover the cost of a lawsuit, jury award, or settlement.
- Property damage: If you’re in an accident and cause damage to another’s property, such as sliding on ice into your neighbor’s mailbox or hitting a parked vehicle, this can help pay for the damage.
- Uninsured motorist: If you’re in an accident and the other driver is uninsured or underinsured, this will help pay for your medical expenses and damaged vehicle.
- Medical expense: Covers medical-related expenses after an accident, including hospital stays, doctor visits, and ambulance fees.
- Personal injury protection: Personal Injury Protection (PIP) is required in some states and can cover medical expenses, lost wages, lost services (such as childcare), and funeral expenses.
- Glass Repair Deductible Waiver: Connect customers get free windshield repairs, which waives their deductible if their windshield only needs repair rather than replacement.
- Lifetime renewability: If something unexpected happens, even more than once, you may still be able to have your policy renewed for your lifetime.
- Stolen key replacement: If you have comprehensive coverage, Costco Connect replaces your stolen key and lock at no additional cost. If the replacement costs less than $250, your deductible will be waived.
Additional Coverage Options offered by Costco Auto Insurance (Riders)
Costco members can enjoy the following additional benefits:
- Real-time roadside assistance: This covers the cost of help for a flat tire, dead battery, low fuel, towing, and other roadside emergencies.
- Accident travel expense coverage: To make your life easier when you’re on vacation or traveling and involved in a car accident, Connect will help cover accommodation and travel expenses if in an accident more than 100 miles from home disables your vehicle.
- Guaranteed auto protection: GAP insurance covers the difference between what your new car is worth, or what you still owe, and what your insurance policy will pay out.
- New car replacement: Connect’s new car replacement coverage allows you to replace your vehicle with the same make and model at up to 110% of the manufacturer’s suggested retail price if it’s within the first year of ownership or 15,000 miles.
- Accident forgiveness: This coverage overlooks a first at-fault accident, preventing your premiums from increasing. You must have maintained a clean driving record for a certain amount of time before qualifying for this coverage.
Costco Executive members get additional perks, including free roadside assistance and lifetime renewability.
How Much Does Costco Auto Insurance Cost?
The cost of Costco Connect insurance is $114 per month or $1,368 per year, cheaper than the national average of $1,638, Policygenius reports. Costco also claims that members who switched to Connect saved, on average, $595.86 in their first year.
Keep in mind that the price of auto insurance through Costco will depend on various factors, including ZIP code, driving history, age, and type of car. It will also depend on the discounts you’re eligible for.
Some discounts that Costco offers include the following:
- Premier safety discount: Available for those without accidents, traffic violations, or claims within the past four years.
- Defensive driver course discount: Take a “refresher” course through your state’s DMV or other accredited organization and receive a discount upon completion.
- Discounts for vehicle safety features: Includes anti-lock brakes, airbags, automatic seatbelts, and anti-theft devices.
- Garaging discount: For those who park in a garage overnight. Only available in certain states.
- Good student discount: For full-time students who meet certain qualifications.
- Student away discount: Available for students over 100 miles from home without a car. Allows them to keep coverage for weekends and school breaks without paying full price.
- Multi-car discount: More than one vehicle insured qualifies for a discount.
- Multi-product discount: Bundling auto with home, auto with umbrella, or auto with home and umbrella insurance saves.
- Tenure discount: When customers reach certain time milestones, Connect will reward them with a lower premium than new customers may get.
Keep in mind that you’ll also need a Costco membership to purchase Connect. There are two types of Costco memberships: Gold Star, which allows members to shop in-store and online, and the Executive, which provides all the same benefits as the Gold Star plus 2% cash back. The Gold Star membership costs $65 per year, while the Executive costs $130 per year.
How to Purchase and Manage a Costco Auto Insurance Policy
To obtain a quote, members can select their membership type from Costco’s Auto & Home Insurance site. Keep the following information for you and any other drivers nearby when purchasing a policy:
Personal information:
- Date of birth
- Name
- Address
- Gender
- Marital status
- Contact information
- Payment information
Vehicle information:
- Make, model, year
- Ownership (Lease, Finance, or Own)
- Primary use (Pleasure, Work/School, Personal)
- Annual mileage
Driving history:
- Age you were first licensed
- Past Incidents (moving violations, criminal record, suspensions, etc.)
Policy information
- Current insurance company and limits
- Desired start date
How to File a Claim with Costco Auto Insurance
Costco Auto Insurance customers can file claims 24/7 online or with over-the-phone reporting at 1-800-872-5246. Those who report losses over the phone (and with some online claims) will be contacted within the next business day. Members can pick their favorite repair facility, or Connect can recommend one nearby. It also has preferred car rental facilities.
The company recommends preparing the following information before reporting a claim:
- Your policy number
- Vehicle information
- Auto accident details
- Police report (if applicable)
- The name/insurance information for the other party involved in the accident (if applicable)
What if Costco Auto Insurance Denies My Claim?
If Costco Connect denies your claim or pays a low settlement, you can request an appeal. You can check your insurance policy for instructions or ask your local insurance agent for help. Be aware that Connect may request additional evidence or conduct another inspection.
If you’re still unhappy with the appeal results, you can file a complaint with your state’s insurance commissioner or hire an experienced car accident attorney for further investigation.
Costco Auto Insurance Customer Reviews and Ratings
Costco Connect received lots of negative customer reviews. Policyholders expressed dissatisfaction with its poor customer service, slow claims handling, and premium increases.
Take a look at its ratings from various sites.
- Better Business Bureau: 1.24 out of 5 stars
- Wallethub: 1.4 out of 5 stars
For customer ratings, Costco Connect stands out for having a low complaint index ratio and strong financial ratings. Connect by American Family ranks 2nd in California based on JD Power’s Customer Satisfaction Survey. Meanwhile, American Family Insurance, its parent company, ranks highly for customer satisfaction across other regions.
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Compare auto insurance quotes and find an affordable car insurance policy that is right for you.
Costco Auto Insurance Alternatives
Costco Auto Insurance vs. AAA Auto Insurance
Both Costco and AAA Auto Insurance require membership for auto insurance. Costco’s auto insurance is supplied through Connect, powered by American Family. AAA, known for its roadside protection, works with several insurance providers, including The Hartford, Progressive, Travelers, and MetLife.
While both companies offer several discounts, AAA also offers a hybrid/alternative fuel discount. For those who drive a hybrid vehicle or want to compare several different providers simultaneously, it may be worth checking into AAA and comparing prices with Costco’s auto insurance.
Costco Auto Insurance vs. AARP Auto Insurance
AARP car insurance is another membership-driven choice, and members have to be 50 or older. While Costco’s insurance is offered through American Family, AARP’s is offered through The Hartford Auto Insurance. AARP also offers RecoverCare, a unique program that helps care for your home and animals while they are recovering from an accident.
Both companies are ranked on J.D. Power’s Auto Claims Overall Customer Satisfaction list. The Hartford ranked above the industry average while American Family ranked below. If you are both a Costco and AARP member or considering becoming one, you may want to compare both companies for price and availability to see which makes the most sense.
Read our AARP car insurance review.
Costco Auto Insurance FAQ
Costco’s auto insurance is called Connect. Connect is an American Family company, one of the largest car insurers in the United States. You can also purchase a home, umbrella, business, and other specialty insurance through Costco.
Costco car insurance is about 16% cheaper than the national average, but its competitors, like GEICO and State Farm, may offer even cheaper rates. Before buying a policy, it’s a good idea to compare quotes from different companies. This ensures you’re getting the best deal on the coverages you need.
Costco car insurance costs about $1,368 per year or $114 per month for a full-coverage policy. Your quote will vary depending on your driver’s profile, claims history, location, and other factors.
Yes, you need to be a member to get car insurance at Costco. Gold Star members pay an annual fee of $65, while executive members pay $120. But if you’re a Costco member, you aren’t required to purchase auto insurance with them.
Why You Should Trust Us: What Went into Our Costco Auto Insurance Review
Our insurance review methodology consists of gathering and analyzing data from industry-trusted sources. We use this information to evaluate and compare auto insurance companies based on the following factors:
- Extend of coverage: Most drivers will need standard coverages like comprehensive, collision, and liability coverage. However, you may require different specialized coverages, such as if you’re a high-risk driver or drive a luxury car. Insurance companies carry different policy options for different needs. We examine what carriers offer outside the standard options (riders) and who it may be best for.
- Average cost: An “affordable” insurance policy is generally one that is lower than the cost of a typical full coverage policy for an 18 to 70-year-old male or female policyholder. We also considered whether a company offers low rates for certain policyholder demographics (e.g., high-risk drivers) and provides additional benefits that increase its value.
- Customer service: A company’s quality of customer service is determined by the helpfulness and professionalism of its Insurance agents. To understand a provider’s quality of customer service, we look at its JD Power Auto Insurance Claims Satisfaction Study ranking and the NAIC complaint index ratio to see how each provider stacks up amongst its competitors. We also review customer reviews to see what policyholders say about the company.
- Financial stability: An insurance company’s financial health indicates an insurer’s longevity and ability to meet financial obligations, like paying claims. We use AM Best to determine if a company can withstand market volatility and reliably pay claims. A++ is the highest rating a company can receive, indicating superior financial strength.
Learn more about how Business Insider reviews auto insurance.
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