Costco Car Insurance
Drive with confidence knowing that you have the best auto insurance in the industry
Who are we?
Costco Wholesale Corporation, commonly known as Costco, is an American multinational corporation that operates a chain of membership-only warehouse clubs. The company was founded in 1976 and is headquartered in Issaquah, Washington, United States. Costco is the second-largest retailer in the world after Walmart, with over 800 warehouses worldwide
Costco, the retail giant recognized for its membership-based warehouse model, has significantly expanded its offerings beyond the traditional realm of groceries and household goods. In a strategic move to diversify its portfolio and cater to the evolving needs of its customer base, Costco ventured into the insurance sector. This expansion into insurance aligns with the company’s commitment to providing value and cost-effective solutions to its loyal members.
About Costco Car Insurance
Car insurance, a vital component of the insurance sector, plays a pivotal role in safeguarding individuals and their assets. As a financial protection tool, car insurance is designed to mitigate the financial risks associated with vehicular accidents, damages, and liabilities. This form of insurance is not merely a legal requirement in many jurisdictions; it serves as a practical means for individuals to shield themselves from potential financial setbacks resulting from unforeseen events on the road.
Costco, the retail warehouse chain, offers car insurance policies under the Connect brand, which is backed by American Family Insurance. Through Connect, Costco offers a range of auto insurance policies, as well as home and condo insurance, renters insurance, umbrella insurance, specialty insurance (which includes recreational vehicles such as motorcycles, ATVs, and boats), and business insurance.
All the common coverages are offered, such as comprehensive, collision, bodily injury, property damage, uninsured motorist, medical expense, personal injury protection, roadside assistance and towing, rental car insurance, gap insurance, and new car replacement coverage. Unlike some insurers, Costco car insurance does not offer coverage for rideshare services.
Costco car insurance is available in 45 states and the District of Columbia. Policies are not available for residents of Alaska, Louisiana, Maine, North Dakota, and Wyoming. Though Costco previously offered auto and home insurance policies in California and Florida, it no longer offers new policies in those states. California and Florida residents with existing Costco insurance policies will not be affected.
Customers must be Costco members to purchase a Connect insurance policy. In some states, Costco members are entitled to discounts on Costco’s insurance policies.
Importance of Costco Car Insurance
Understanding the importance of car insurance is fundamental in appreciating why a retail giant like Costco would choose to integrate it into its array of services. Beyond the legal mandates, car insurance serves as a safety net for individuals who rely on their vehicles for daily activities. Whether commuting to work, running errands, or embarking on road trips, the inherent risks of being involved in a vehicular incident underscore the necessity of securing reliable insurance coverage.
Financial protection, a core tenet of insurance, becomes especially crucial in the context of car ownership. The costs associated with repairing or replacing a damaged vehicle can be substantial, and liability claims arising from accidents can lead to significant financial burdens. Car insurance steps in to alleviate these burdens by covering repair expenses, replacement costs, and legal liabilities, thereby preventing individuals from shouldering the full financial weight of unfortunate events.
Moreover, car insurance extends beyond the protection of the vehicle itself. It encompasses coverage for medical expenses in case of injuries sustained during an accident. This aspect of insurance underscores its broader role in ensuring the well-being of individuals and their passengers. The financial support offered by insurance can make a crucial difference in accessing necessary medical care and recovering from the physical and emotional aftermath of an accident.
By providing insurance services, Costco not only enhances its member offerings but also positions itself as a one-stop shop for various essential services. The trust and loyalty established through the years of retail operations become valuable assets in promoting Costco’s insurance services, offering members a familiar and reliable option for their car insurance needs.
As Costco expands its reach into the insurance landscape, it aims to redefine the member experience by integrating insurance seamlessly into its existing ecosystem. This integration not only simplifies the process of acquiring insurance but also fosters a sense of trust and reliability. Costco’s reputation for transparency and customer-centric practices is expected to extend to its insurance services, providing members with a straightforward and user-friendly experience.
Costco car Insurance Overview
As of February 2024, Costco car insurance is still offered through American Family Insurance, which is the parent company of CONNECT, the insurance provider that Costco partners with. CONNECT offers auto, home, and renters insurance, as well as umbrella and speciality insurance policies.
The company has an A rating from AM Best, which is a credit rating agency that evaluates the financial strength of insurance companies. CONNECT is available in 44 states and Washington, D.C. but is not currently available in Alaska, Louisiana, Maine, North Dakota, Rhode Island, or Wyoming
According to the National Association of Insurance Commissioners (NAIC), American Family Insurance was the seventh-largest insurance provider in the United States in 2021, with a market share of 4.18%.
Costco’s Entry Into Insurance
In recent years, Costco has expanded its business into the insurance sector. Costco’s insurance offerings include auto, home, and health insurance services. Costco’s auto insurance program is available to members in the United States and offers competitive rates and discounts. Costco’s auto insurance program is underwritten by Ameriprise Auto & Home Insurance, a subsidiary of Ameriprise Financial, Inc. Costco members who purchase auto insurance through the program can save up to $500 per year.
Car insurance is an essential component of financial protection for car owners. It provides coverage for damages to your vehicle and compensates for third-party injuries and property damage. Car insurance also provides financial protection in case of unforeseen events such as accidents, theft, vandalism, or natural disasters. Without the right coverage, you could be left with significant expenses. Therefore, it is crucial to have car insurance to protect your assets and finances.
Costco, the popular membership warehouse club, offers a variety of insurance products, including car, home, and renters insurance. The company’s decision to offer car insurance is driven by its desire to provide its members with high-quality insurance products at affordable prices. Costco’s car insurance is offered through CONNECT, which is backed by American Family Insurance
Costco Executive Members receive exclusive benefits such as roadside assistance, lifetime renewability, and home lockout assistance. According to Costco’s website, Costco members reported saving an average of $587.17 in the first year by switching to CONNECT
Costco’s car insurance offers a wide range of benefits, including identity theft protection, refrigerated property coverage, equipment breakdown, and more. Depending on where you live, you can choose your own licensed repair facility if your car needs to be fixed
In addition, Costco offers generous discounts to its members. According to Costco’s website, Costco members reported saving an average of $587.17 in the first year by switching to CONNECT. When you buy your insurance through Costco, you’ll be eligible for a variety of discounts that will help lower your monthly premium. In addition, if you have more than one policy with the company, you’ll receive an even bigger discount
Coverage Options
Costco car insurance provides a range of coverage options tailored to meet the diverse needs of its members. Understanding these coverage options is crucial for members to make informed decisions about their insurance protection. Let’s look into the types of coverage offered by Costco car insurance and compare them with other providers
These include:
Personal Injury Protection (PIP): This coverage option is similar to medical payments coverage but also covers lost wages and other expenses.
Collision Coverage: This coverage option pays for damages to your vehicle if you collide with another vehicle or object.
Comprehensive Coverage: This coverage option pays for damages to your vehicle caused by events such as theft, vandalism, or natural disasters.
Liability Insurance: This coverage option is mandatory in most states and covers the cost of damages or injuries you cause to others in an accident.
Medical Payments Coverage: This coverage option pays for medical expenses you incur as a result of an accident, regardless of who was at fault.
Uninsured/Underinsured Motorist Coverage: This coverage option pays for damages or injuries you sustain in an accident caused by a driver who doesn’t have enough insurance to cover the costs.
Costco car insurance also offers additional coverage options such as roadside assistance, rental car insurance, and new car replacement coverage
When compared to other providers, Costco car insurance offers similar coverage options to other major insurance companies. However, the rates offered by Costco car insurance are often lower than those offered by other providers. According to a recent study by Insure.com, Costco members who switched to CONNECT, powered by American Family Insurance, saved an average of $595.86 on their auto insurance in the first year
Pricing and Discounts
Costco car insurance offers a range of discounts and cost-saving features to its customers. Costco members can purchase car insurance from Connect by American Family Insurance and get a member discount. The following are some of the discounts and cost-saving features offered by Costco car insurance:
Multi-policy Discount: You can save up to 25% on your auto insurance premium by bundling your home and auto insurance policies with Costco car insurance
Safe Driving Discount: You can save up to 30% on your auto insurance premium by maintaining a safe driving record
Good Student Discount: If you’re a student with good grades, you can save up to 25% on your auto insurance premium
New Car Replacement: If your new car is totaled within the first year or 15,000 miles, Costco car insurance will replace it with a new one
Accident Forgiveness: If you’re involved in an accident, your rates won’t increase
Roadside Assistance: Costco car insurance offers 24/7 roadside assistance to its customers
Lifetime Renewability: Your policy will never be canceled due to age or health reasons
When compared to other providers, Costco car insurance offers similar coverage options to other major insurance companies. However, the rates offered by Costco car insurance are often lower than those offered by other providers.
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According to ValuePenguin, the average annual premium for Costco car insurance in the United States was $1,211 in 2020, which is lower than the national average of $1,674. However, the cost of Costco car insurance may vary depending on several factors such as age, gender, location, driving history, credit score, vehicle type, and coverage level
It’s worth noting that Costco members can purchase car insurance from Connect by American Family and get a member discount. Connect has a robust menu of car insurance discounts but a slightly higher than-average level of consumer complaints. Costco car insurance might be worth considering if you’re a Costco member who is more interested in broad coverage than in price breaks for being a low-mileage driver However, it’s important to shop around for car insurance quotes from multiple insurers before making a decision
What are our Customers saying?
Customer Experience
- According to a review by Forbes Advisor, Costco car insurance offers broad coverage options and many discounts, but has a slightly higher-than-average level of consumer complaints.
- Another review by Business Insider states that Costco car insurance has high customer satisfaction rankings for its insurance
- In terms of claims processing, Costco car insurance offers a hassle-free claims process that can be initiated 24/7 online or via phone.
- Costco car insurance provides customer support through Connect by American Family Insurance. You can get in touch with their insurance specialists by calling or by requesting a quote online.
Comparison with Competitors: Costco vs Geico
When compared to GEICO, Costco car insurance offers similar coverage options to other major insurance companies. However, the rates offered by Costco car insurance are often lower than those offered by other providers. Costco members who switched to CONNECT, powered by American Family Insurance, saved an average of $595.86 on their auto insurance in the first year.
Here is a SWOT analysis of Costco car insurance
Strengths
Low Prices: Costco car insurance offers competitive rates and discounts to its members.
Broad Coverage Options: Costco car insurance offers a range of coverage options to its customers, including liability insurance, collision coverage, comprehensive coverage, and more.
Discounts: Costco car insurance offers a range of discounts and cost-saving features to its customers, including multi-policy discounts, safe driving discounts, and good student discounts.
Hassle-Free Claims Process: Costco car insurance offers a hassle-free claims process that can be initiated 24/7 online or via phone.
Weaknesses
Limited Availability: Costco car insurance is only available to Costco members in certain states.
Higher Consumer Complaints: Costco car insurance has a slightly higher than average level of consumer complaints.
Opportunities
Expansion: Costco car insurance could expand its coverage area to reach more customers.
New Products: Costco car insurance could offer new products and services to its customers to increase its market share.
Threats
Competition: Costco car insurance faces competition from other major insurance providers such as GEICO.
Regulatory Changes: Changes in regulations could impact the insurance industry and affect Costco car insurance’s business.
GEICO is one of the most popular car insurance providers in the U.S., selling policies in every state. Costco car insurance, on the other hand, is a less popular option that is only available to Costco members in certain states. According to a comparison by The Zebra, Costco auto insurance — through CONNECT — is cheaper than GEICO, with all metrics constant. Both GEICO and Costco offer similar coverage options, but Costco’s rates are often lower than GEICO’s.
Innovation and Technology
Costco has been known to use innovative technologies and approaches in its insurance services. One of the most notable approaches is the company’s focus on providing affordable insurance policies to its members. Costco’s insurance services are available exclusively to its members, which allows the company to offer lower prices than many other insurance providers. This approach has been successful, as Costco’s insurance services have become increasingly popular among its members.
Another innovative approach that Costco uses in its insurance services is its partnerships with top-rated insurance companies. Costco partners with companies such as Ameriprise and Connect America to provide its members with a wide range of insurance options. These partnerships allow Costco to offer its members high-quality insurance policies at competitive prices.
In addition to these approaches, Costco also uses innovative technologies to improve its insurance services. For example, the company has implemented a digital platform that allows members to manage their insurance policies online. This platform provides members with easy access to their policy information, as well as the ability to make changes to their policies as needed.
Additionally, Costco uses data analytics to identify trends and patterns in its members’ insurance needs. This allows the company to tailor its insurance offerings to better meet the needs of its members.
Costco’s insurance services also use innovative technologies to streamline the claims process. The company has implemented a mobile app that allows members to file claims quickly and easily. Members can use the app to take photos of damage, submit claims, and track the status of their claims. This approach has been successful, as it has helped to reduce the time and effort required to file a claim.
Regulatory Compliance
Costco ensures compliance with insurance regulations by adhering to the guidelines set forth by the National Association of Insurance Commissioners (NAIC). The company is committed to providing its members with high-quality insurance policies that meet or exceed industry standards.
To ensure regulatory compliance, Costco works closely with its insurance partners to ensure that all policies are in compliance with state and federal regulations. The company also has a dedicated compliance team that is responsible for monitoring regulatory changes and ensuring that all policies are updated accordingly.
In addition to these measures, Costco also provides its members with transparent and easy-to-understand policy documents. These documents clearly outline the terms and conditions of each policy, as well as any exclusions or limitations that may apply. This approach helps to ensure that members are fully informed about their insurance coverage and can make informed decisions about their policies.
Finally, Costco also has a robust customer service team that is available to answer any questions or concerns that members may have about their insurance policies. This team is trained to provide accurate and helpful information to members, and can assist with any issues related to policy compliance.
Future Outlook
One of the most significant trends in the car insurance industry is the increasing use of telematics. Telematics is a technology that allows insurance companies to track drivers’ behavior and adjust their premiums accordingly. This technology has become increasingly popular in recent years, and many insurance companies are now offering telematics-based policies. It is possible that Costco may also adopt this technology in the future to provide its members with more personalized insurance policies.
Another trend in the car insurance industry is the increasing use of artificial intelligence (AI). AI can be used to analyze large amounts of data and identify patterns and trends that would be difficult for humans to detect. This technology can be used to improve the accuracy of risk assessments and help insurance companies to better tailor their policies to the needs of their customers. It is possible that Costco may also adopt AI in the future to improve its insurance services.
Finally, there is a growing trend towards usage-based insurance. Usage-based insurance policies allow drivers to pay for their insurance based on how much they drive. This approach can be more cost-effective for drivers who do not drive frequently. It is possible that Costco may also offer usage-based insurance policies in the future to provide its members with more flexible insurance options.
App available and policy highlights
Costco car insurance has a mobile app available for both iOS and Android devices. The app allows you to view your policy details, pay your bill, and file a claim
To download the Costco car insurance app, please follow these steps:
1. Open the App Store on your iOS device or Google Play Store on your Android device.
2. Search for “Costco car insurance” in the search bar.
3. Click on the “Connect by American Family Insurance” app.
4. Click on the”Install” button to download the app.
Once you have downloaded the app, you can log in to your account to view your policy details, pay your bill, and file a claim.
Here are some policy highlights of Costco car insurance:
- Costco members can purchase car insurance from Connect by American Family and get a member discount.
- Costco car insurance provides standard coverage options and endorsements that can be added to a policy.
- Costco members are eligible for exclusive discounts through Connect, including accident forgiveness and new car replacement.
- Many additional discounts are available for extra savings.
- However, there are no usage-based car insurance or pay-per-mile car insurance options, and no rideshare insurance for Uber and Lyft drivers.
- Costco car insurance is available in all states and Washington, D.C. Certain coverage and discounts can vary by state.
- Costco isn’t currently selling new car insurance policies in California or Florida.
How to Buy Car Insurance from Costco
The first step to buying a car insurance policy from Costco is to ensure your Costco membership is active since you’ll need it to complete the quote process. Non-members can go through the quote process online but cannot apply for a policy without a Costco membership.
To get a quote, you can complete the quote form on Costco’s website
Costco car Insurance Reviews: how legit are they
Our reviews team gives Costco auto insurance 4.3 out of 5.0 stars for its cheap insurance rates overall and good customer service record. While Costco does not offer car insurance directly, it provides a healthy amount of options to choose from through the partner American Family Insurance.
Costco also offers rental car insurance through its Citi credit card which has a wide array of coverage but does not cover injuries in rentals. Though Costco auto insurance can be a great option, we urge you to look around and compare your options to get the best deal for you.
Getting a policy through Costco can mean lower premiums and exclusive benefits, especially for those with upgraded Executive memberships.
If you’re considering a policy through Costco, you should definitely factor in the cost of membership: As of November 2023, a standard Gold Star membership costs $60 a year plus tax, while an Executive membership costs $120.
Costco Care Insurance Customer satisfaction and financial strength
How good is Costco car insurance in terms of customer satisfaction and financial strength?
Customer satisfaction is a key measure of how well an insurance company satisfies the needs and expectations of its customers. Customer satisfaction can be influenced by various factors, such as how claims are handled, how customer service is provided, how prices are set, what coverage options are available, and what discounts are offered. According to the 2024 J.D. Power U.S. Auto Insurance Study, Connect ranked 18th out of 24 insurers in the Southwest region, with a score of 810 out of 1,000.
This is lower than the regional average of 832 and the industry average of 835. Connect also got a slightly higher than average number of consumer complaints, according to the National Association of Insurance Commissioners (NAIC).
Financial strength is another important factor to consider when choosing an insurance company. Financial strength shows the ability of an insurer to pay its claims and obligations, even in times of economic trouble or uncertainty. A financially strong insurer can give peace of mind and security to its customers.
According to AM Best, a leading rating agency for the insurance industry, Connect has an A (Excellent) rating, which shows a strong financial position and a stable outlook. Connect’s parent company, American Family Insurance, also has an A (Excellent) rating and a stable outlook. American Family Insurance is the 10th largest property and casualty insurer in the U.S., with over $12 billion in direct premiums written in 2023.
Based on these two aspects, Costco car insurance has some pros and cons. On the plus side, Costco car insurance offers a variety of coverage options and endorsements, such as accident forgiveness, new car replacement, lifetime renewability, and roadside assistance. Costco car insurance also offers a number of discounts, such as a multi-policy discount, a safe driver discount, a good student discount, and a loyalty discount. Moreover, Costco Executive Members can get extra benefits, such as a free glass repair deductible waiver, a lifetime limit increase on roadside assistance, and a 50% discount on home lockout services.
On the minus side, Costco car insurance has a low customer satisfaction rating, which suggests that it may not offer the best service or value to its customers. Costco car insurance also has a higher than average number of consumer complaints, which suggests that it may not deal with claims fairly or quickly.
In addition, Costco car insurance does not offer some features that are becoming more popular and competitive in the market, such as usage-based insurance, pay-per-mile insurance, or rideshare insurance. These features can help drivers save money and adjust their coverage based on their driving habits and needs.
In conclusion, Costco car insurance is an effective and competitive option for Costco members who are looking for affordable insurance policies that meet or exceed industry standards. The company’s exclusive discounts for members, accident forgiveness, and new car replacement are just a few of the benefits that make Costco car insurance an attractive option for many drivers.
However, it is important to note that Costco does not offer usage-based car insurance or pay-per-mile car insurance options, which may be a drawback for some drivers. Additionally, while Costco’s insurance services are generally well-regarded, the company has received some complaints related to claim delays and unsatisfactory claim settlement offers. Overall, Costco car insurance is a solid choice for drivers who are looking for affordable, high-quality insurance policies.
You can find more details about Costco car insurance, on their official website.
Frequently Asked Questions
What insurance carrier does Costco use?
Costco uses Connect by American Family Insurance as its insurance carrier. Connect is a division of American Family Insurance that offers auto, home, renters, condo and umbrella policies to Costco members and non-members alike.
Is it worth buying a car through Costco auto program
Buying a car through the Costco auto program may be worth it if you are a Costco member who wants to enjoy exclusive discounts, benefits and hassle-free shopping.
Is Costco connect insurance cheaper?
Costco Connect insurance may or may not be cheaper than other insurance options, depending on your personal situation, driving history, location and coverage needs. Costco members may receive a member-only discount on their policies, but that does not guarantee the lowest rates.
Do I need a Costco membership to get connect insurance?
You do not need a Costco membership to get Connect insurance, but you may miss out on some perks and savings that are only available to Costco members. For example, Costco Executive members receive additional benefits such as roadside assistance, lifetime renewability, home lockout assistance and home glass repair reimbursement
How much is Costco car insurance?
Connect Auto Insurance has an average annual premium of $1,068. This is lower than the national average by some margin. However, keep in mind that this is just the average and that a quote you receive may differ.
Who should consider Costco auto insurance?
Costco auto insurance is a service offered by Connect by American Family Insurance to Costco members. Costco members may receive a member-only discount and other benefits on their auto insurance policies. 3 Some of the features of Costco auto insurance include:
– Accident forgiveness
– New car replacement
– Gap insurance
– Glass repair deductible waiver
– Roadside assistance (for Executive members)
– Lifetime renewability (for Executive members)
Costco auto insurance may be a good option for Costco members who are looking for affordable and comprehensive coverage for their vehicles. However, it is always advisable to compare rates and reviews from multiple insurers before making a decision. You can get a free quote from Costco auto insurance by visiting their website
