Costco is one of the nation’s leading wholesale stores, offering customers high-quality products at an affordable price. They’ve developed a cult following over the years, with customers ready to rave about everything from their Costco leggings to their warm chocolate chip cookies.

As an extension of their mission to offer more for less, Costco launched CONNECT insurance in partnership with American Family Insurance (AmFam). Members now have access to more affordable auto and home insurance.

Below, we’ll break down how Costco car insurance works, what it offers, and whether it’s worth purchasing a policy.

How Costco Car Insurance Works

Costco partners with American Family Insurance, a leading insurance provider in the US, to offer affordable home and auto insurance policies to Costco members. They claim Costco members who saved by switching to CONNECT reported an average savings of $595.86 in their first year.

Coverage

CONNECT by AmFam offers standard coverage options—collision and comprehensive. Collision coverage protects you and your vehicle when damage is caused by another vehicle. Comprehensive coverage offers additional coverage for non-collision related events such as theft, windshield damage, and weather-related incidents.

CONNECT also offers uninsured motorist coverage—perfect for individuals in states where this coverage is required. This type of coverage helps cover your medical expenses if you’re in an accident where the other driver doesn’t have car insurance.

Availability

American Family Insurance underwrites in all states except Alaska, Louisiana, Maine, North Carolina, and North Dakota. It’s unclear whether policies are available in Rhode Island, West Virginia, and Wyoming. And, as of late 2023, AmFam is also no longer offering new auto insurance policies in California or Florida.

Eligibility

You must be a Costco Executive Member to be eligible for a CONNECT auto insurance policy. Membership costs $120 per year—$60 for general membership and $60 for the Executive Member upgrade.

Benefits

Given that Costo is known for affordability, it’s no surprise their auto insurance policies come with several exclusive discounts and benefits. From safe driver discounts to roadside assistance, your policy comes with multiple opportunities to save.

How Much Costco Car Insurance Costs

Because American Family Insurance underwrites the policies, we assume the rates are fairly similar for CONNECT policies. AmFam customers pay an average of $2,598 per year for full coverage insurance and $984 per year for minimum coverage insurance.

These rates place Costco’s car insurance among the most affordable plans across several popular auto insurance providers.

Pros and Cons

Affordability is a major benefit of Costco’s auto insurance policies. That said, there are a few other factors to consider before purchasing a policy.

Pros

There are several benefits of Costco’s car insurance.

Exclusive Discounts and Benefits

Costco members get access to a slew of exclusive discounts and benefits simply for purchasing an auto insurance policy.

• Roadside Assistance: Covers up to $75 per occurrence of a vehicle mishap (ie. flat tire, dead battery, running out of gas, etc.)
• Lifetime Renewability: As long as you’re a Costco Executive Member, you can receive lifetime renewability for your policy.
• Good Driver Discount (CA only): Lower premiums for safe drivers
• Premier Safety Discount: You’ll receive a discount if all insured drivers on the policy have spotless records.
• Defensive Driver Discount: You may receive a discount if you take a “refresher” driving course.
• Vehicle Safety Feature Discounts: If you drive a vehicle with anti-lock brakes, air bags, automatic seatbelts, or anti-theft devices, you may receive a discount.
• Garaging Discount: If you park your vehicle overnight in a garage, as opposed to an open driveway, you may receive a discount.
• Good Student Discount: While young drivers typically pay higher rates, CONNECT may offer a lower premium if the young driver exhibits academic achievement.
• Student Away Discount: If a student on the policy attends school more than 100 miles away, you may receive a discount. This keeps the driver insured should they drive on the weekend or during a break at home, but lowers the premium assuming they’re driving less than normal.
• Multi-Car Discount: If you insure more than one car, truck, or van with CONNECT, you’ll receive a lower rate.

American Family Mobile App

CONNECT policyholders can purchase plans, file claims, and pay bills through the American Family mobile app. You’ll find it in both the Apple App and Google Play Stores.

Lifetime Renewability

While some auto insurance providers may drop customers after an accident or traffic violation, Costco’s auto insurance comes with lifetime renewability—as long as you remain a Costco Executive Member. This means you can keep your policy, even after an accident.

Cons

There are a few cons to consider before purchasing an auto insurance policy from Costco.

You’ll Need to Be a Costco Member

Costco’s car insurance is available to Costco Executive Members. This makes sense from Costco’s standpoint, but it may be bothersome for some customers. Considering a Costco membership is $60 per year, plus an additional $60 per year Executive Membership upgrade fee, it might not be worth it depending on how much you save on your premiums.

Limited Reviews from Real Customers

There are a few reviews on Credit Karma, all of which are 1-star ratings. There have also been 155 complaints to the Better Business Bureau over the last three years, although this isn’t anything crazy. Customers complain of poor customer service, lack of coverage for roadside assistance, and issues with coverage and claims.

Not Available Everywhere

While Costco has warehouse locations in all but three states, their car insurance policies aren’t available in several.

Our Final Review

Costco’s car insurance offers standard coverage at an affordable price. While it comes with multiple benefits, like roadside assistance and various discounts, there aren’t enough reviews to say it’s that much better than other providers on the market.

Based on our research, CONNECT seems to be a no-frills, standard option. It’s best for Costco members with a safe driving record looking for basic coverage.

Frequently Asked Questions

How Does Costco’s Car Insurance Work?

Costco partners with American Family Insurance to power their auto insurance offering, CONNECT. While Costco advertises the product, AmFam underwrites and manages all policies.

Does Costco Offer Insurance in California?

As of late 2023, American Family Insurance no longer offers new auto insurance policies in California or Florida. Given that AmFam underwrites Costco’s insurance policies, Costco does not offer insurance in California.

Is Costco Insurance Cheaper Than Others?

We compared the average auto insurance premiums across several of the most popular auto insurance providers in the United States. Costco’s partner American Family Insurance was the third cheapest overall.

Is Costco Car Insurance Good?

It’s challenging to say whether Costco’s car insurance is “good.” From the outside, it appears they offer affordable coverage with various member benefits. However, there are several reviews from customers complaining of issues filing claims and receiving payouts.