1. Introduction
Costco is widely known for its bulk shopping experience, but did you know that it also offers car insurance? Through a partnership with CONNECT by American Family Insurance, Costco provides auto insurance policies exclusively to its members. This offering is designed to provide competitive rates, exclusive discounts, and high-quality customer service.
If you’re a Costco member or thinking about becoming one, you might be wondering: Is Costco car insurance worth it? In this guide, we’ll explore the coverage options, benefits, costs, and everything else you need to know before signing up.
2. Who Provides Costco Car Insurance?
Costco itself doesn’t directly underwrite or sell car insurance. Instead, it partners with CONNECT by American Family Insurance, a reputable provider with a long-standing presence in the industry.
About American Family Insurance
- Founded in 1927, American Family Insurance has been offering auto, home, and life insurance policies for nearly a century.
- CONNECT, a subsidiary of American Family, specializes in providing exclusive insurance deals for partner organizations like Costco.
- Costco members get special discounts and benefits that aren’t available to the general public.
This partnership allows Costco members to access premium coverage at discounted rates while still receiving the support and reliability of a well-established insurance company.
3. Coverage Options with Costco Car Insurance
Costco car insurance provides a range of standard and optional coverages, similar to other major insurance providers. Here’s what you can expect:
Standard Coverage Options:
✔ Liability Coverage – Covers bodily injury and property damage if you’re at fault in an accident.
✔ Collision Coverage – Pays for damages to your car in a collision, regardless of fault.
✔ Comprehensive Coverage – Covers theft, vandalism, and natural disasters.
✔ Personal Injury Protection (PIP) – Helps cover medical expenses for you and your passengers.
✔ Uninsured/Underinsured Motorist Coverage – Protects you if you’re in an accident caused by a driver with little or no insurance.
Additional Coverage Options:
- Rental Car Reimbursement – Covers the cost of a rental car while yours is being repaired.
- Roadside Assistance – Provides towing, battery jumps, and lockout services.
- Gap Insurance – Pays the difference between your car’s value and the amount you owe if it’s totaled.
4. Costco Car Insurance Benefits and Discounts
One of the biggest advantages of getting car insurance through Costco is the cost savings. Costco members enjoy exclusive discounts and additional benefits that other insurance providers may not offer.
Key Benefits:
✅ Member-Exclusive Discounts – Special savings just for Costco members.
✅ 24/7 Roadside Assistance – Included in most policies.
✅ Multi-Vehicle Discounts – Save more when you insure multiple cars.
✅ Home & Auto Bundling – Combine with homeowners insurance for additional savings.
✅ Safe Driver Discounts – Rewards for maintaining a clean driving record.
✅ New Car Replacement – If your car is totaled, you may receive a brand-new replacement (within certain terms).
For Costco Executive Members, the savings and benefits increase even further, making the policy even more attractive.
5. Costco Car Insurance Cost Comparison
How Competitive Are Costco’s Rates?
While rates vary based on factors like location, driving history, and vehicle type, Costco insurance often provides lower premiums compared to other providers. According to customer reports:
- Costco members save an average of $500 per year compared to other insurance companies.
- Costco car insurance is often cheaper than Allstate and State Farm, but may not always beat GEICO or Progressive in some states.
- Executive Members save an additional 10% on average.
Factors That Affect Your Premium:
- Age and Driving History – Safe drivers get lower rates.
- Location – Rates vary by state and even by ZIP code.
- Type of Vehicle – More expensive or high-performance cars typically cost more to insure.
- Coverage Level – Higher coverage limits lead to higher premiums.
If you’re a Costco member looking for affordable and reliable car insurance, it’s definitely worth getting a quote to see how much you can save.
6. Pros and Cons of Costco Car Insurance
Like any insurance provider, Costco car insurance comes with both advantages and disadvantages. Here’s a breakdown to help you decide if it’s the right choice for you.
Pros:
✔ Exclusive Member Discounts – Costco members, especially Executive Members, enjoy additional savings on their premiums.
✔ Reliable Insurance Provider – CONNECT by American Family Insurance is a reputable company with a solid history.
✔ Bundling Discounts Available – You can save even more by bundling auto and home insurance.
✔ 24/7 Roadside Assistance – Many policies include roadside help for emergencies like flat tires, towing, and lockouts.
✔ New Car Replacement Coverage – If your car is totaled, some policies may offer a full replacement with a brand-new vehicle.
✔ Superior Customer Support for Costco Members – Members report above-average customer service experiences compared to traditional insurance providers.
Cons:
❌ Not Available in Every State – Costco car insurance is not offered in all 50 states, so availability depends on where you live.
❌ Requires a Costco Membership – You must be an active Costco member to qualify for coverage.
❌ Rates May Not Always Be the Lowest – While discounts are significant, in some cases, competitors like GEICO or Progressive might offer lower rates.
❌ Third-Party Provider – Since Costco partners with CONNECT, claims and policy adjustments are handled by American Family Insurance, not Costco itself.
7. How to Get a Quote and Sign Up
If you’re interested in Costco car insurance, getting a quote is a simple process.
Step-by-Step Guide to Getting a Quote:
- Visit the Costco Insurance Website – Navigate to the CONNECT by American Family Insurance portal via Costco’s website.
- Enter Your Personal Information – Provide details such as your name, address, vehicle type, and driving history.
- Choose Your Coverage Options – Select the level of coverage you need based on your preferences and state requirements.
- Review Discounts and Savings – Ensure you’re applying all eligible Costco member discounts.
- Compare the Quote with Other Providers – It’s always a good idea to compare rates from GEICO, Progressive, State Farm, and others before making a final decision.
- Sign Up and Purchase Your Policy – If satisfied, proceed with purchasing your policy online or through an insurance representative.
💡 Pro Tip: Costco Executive Members may receive additional discounts on their insurance premiums, so consider upgrading if you want maximum savings.
8. Customer Reviews and Satisfaction Ratings
Customer feedback is essential when choosing an insurance provider. Overall, Costco car insurance receives positive reviews from members, but there are some areas where customers express concerns.
Positive Feedback:
✅ Affordable Pricing – Many Costco members report saving hundreds of dollars per year.
✅ Great Customer Service – Costco members often receive priority service from CONNECT representatives.
✅ Seamless Claims Process – Most customers state that filing a claim is straightforward and hassle-free.
Common Complaints:
❌ Slow Claim Processing Times – Some policyholders report delays in claim settlements.
❌ Limited Availability – Since Costco car insurance isn’t available in every state, some members feel left out.
❌ Higher Rates for High-Risk Drivers – If you have a poor driving record, you may find better rates elsewhere.
9. Costco Executive Membership Perks for Auto Insurance
If you’re a Costco Executive Member, you can unlock even more savings and benefits when purchasing auto insurance.
Extra Perks for Executive Members:
- Additional Discounts on Premiums – Many Executive Members save an extra 5-10% on their policies.
- More Comprehensive Roadside Assistance – Includes extra services such as emergency fuel delivery and tire changes.
- Annual Policy Review – Costco ensures you’re getting the best rates each year.
If you’re on the fence about upgrading your membership, consider these insurance perks along with the other Costco Executive Member benefits.
10. Claims Process with Costco Car Insurance
Filing a claim with Costco car insurance is handled through CONNECT by American Family Insurance. Here’s what to expect:
How to File a Claim:
- Report the Incident – Call the CONNECT claims department or file online.
- Provide Necessary Information – Have your policy number, accident details, and any relevant photos or police reports ready.
- Wait for Claim Assessment – An adjuster will review the claim, inspect damages, and estimate costs.
- Repair or Reimbursement – If approved, you can proceed with car repairs or receive compensation for a totaled vehicle.
Most customers find the claims process to be efficient, but as with any insurer, some delays may occur depending on the complexity of the claim.
11. Does Costco Offer Commercial Auto Insurance?
If you’re a small business owner, you might be wondering if Costco offers commercial auto insurance.
✔ Yes! Costco provides commercial auto insurance options through CONNECT by American Family Insurance.
Who Should Consider It?
- Small business owners with company vehicles
- Rideshare drivers (coverage varies by state)
- Fleet owners looking for bulk discounts
If you need coverage for your business vehicles, Costco’s commercial auto insurance could be a great way to save money.
12. Costco Car Insurance vs. Other Insurance Providers
How does Costco car insurance compare to other major providers?
| Feature | Costco (CONNECT) | GEICO | Progressive | State Farm | Allstate |
|---|---|---|---|---|---|
| Average Savings | $500/year | $350/year | $400/year | $450/year | $400/year |
| Multi-Policy Discount | ✅ Yes | ✅ Yes | ✅ Yes | ✅ Yes | ✅ Yes |
| Roadside Assistance | ✅ Included | ✅ Optional | ✅ Optional | ✅ Optional | ✅ Optional |
| New Car Replacement | ✅ Yes | ❌ No | ✅ Yes | ✅ Yes | ✅ Yes |
| Customer Satisfaction | ⭐⭐⭐⭐ | ⭐⭐⭐⭐ | ⭐⭐⭐⭐ | ⭐⭐⭐⭐⭐ | ⭐⭐⭐ |
While Costco offers competitive pricing and solid coverage, it’s always wise to get multiple quotes before making a decision.
13. Tips for Maximizing Savings with Costco Car Insurance
Want to lower your premiums even more? Try these strategies:
✔ Maintain a Clean Driving Record – Avoid accidents and traffic violations to qualify for safe driver discounts.
✔ Bundle Policies – Combine auto and home insurance for additional savings.
✔ Upgrade to an Executive Membership – Unlock even bigger discounts.
✔ Drive a Safe Vehicle – Cars with anti-theft systems and advanced safety features often qualify for lower rates.
✔ Ask About Available Discounts – Costco offers multiple discount opportunities, so be sure to check them all.
14. Frequently Asked Questions (FAQs)
1. Is Costco car insurance worth it?
Yes! If you’re a Costco member, you can take advantage of exclusive discounts, great coverage options, and excellent customer service.
2. Do I need to be a Costco member to get coverage?
Yes, only active Costco members can qualify for Costco car insurance.
3. Does Costco insurance cover rental cars?
Yes, rental car reimbursement is available as an optional add-on.
4. How does Costco’s customer service compare to other insurers?
Costco members report above-average customer service experiences, but some claims processing times can be slow.
5. Can I bundle Costco car insurance with home insurance?
Yes! You can bundle auto and home insurance for additional savings through CONNECT.
Costco car insurance offers competitive rates, member-exclusive discounts, and reliable coverage. If you’re already a Costco member, it’s definitely worth getting a quote to see how much you can save.
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