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Costco Insurance review 2022

Updated Jun. 1, 2022
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4.3

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Bottom Line

Policyholders who value robust discount options and personalized home insurance coverage over cheap car insurance premiums might consider Costco as their company of choice.

Pros

  • Several discounts for auto and home policies
  • Numerous optional coverage choices for home insurance

Cons

  • Not available in all states
  • Higher-than-average auto premiums
Costco insurance may be right for you if you value convenient policy options. Whether you’re searching for the top home insurance provider or the best car insurance company for your needs, Bankrate’s Costco Insurance review might help you decide whether the carrier is the right fit for your needs.
Costco might not be the first company that comes to mind when you think of insurance, but the company does offer some insurance products to its members. Costco sells car and home insurance policies to customers in 44 states and the District of Columbia through CONNECT by American Family, one of the nation’s largest insurance providers.
 

Costco car insurance

Costco’s car insurance policies are fairly basic and customization options are sparse. This means that Costco car insurance may be a good fit for someone looking for a relatively simple policy. If customizing your coverage is important to you, Costco may not be the right choice, although a few endorsements are available. For example, you may be able to add gap insurance and new car replacement coverage. Additionally, standard types of coverage like liability, personal injury protection, comprehensive coverage and collision coverage are available. Currently, Costco coverage is available in 44 states and Washington, D.C.

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Costco car insurance cost

Costco’s goal is to provide cheap car insurance coverage for its members, but unfortunately the company’s average car insurance rates are on the higher side. And it’s important to keep in mind that you will also need to pay for a Costco membership in order to access its car insurance. For example, the national average cost of car insurance is $1,674 per year for full coverage, whereas American Family — the company that facilitates Costco’s coverage through CONNECT — has an average full coverage premium of $1,911 per year. Minimum coverage is similarly more expensive, with American Family’s average premium of $918 per year far outweighing the national average of $565. Keep in mind that Costco’s rates could be different from AmFam’s, so these numbers are only a guideline.

These rates are averages, which means that your rate will differ based on your unique rating profile, the coverage types and limits you choose, the discounts you qualify for and the state you live in. The best way to know how much you will pay for Costco coverage is to get an insurance quote.

Costco average annual full coverage premium* National average annual full coverage premium
Clean driving history $1,911 $1,674
Speeding ticket $2,020 $2,062
At-fault accident $2,161 $2,311
Adding a 16-year-old driver** $2,544 $2,531
*Costco car insurance is underwritten by American Family Insurance Group.
**16-year-old rates reflect the added cost to their parents’ full coverage car insurance policy.

Costco car insurance discounts

Costco’s rates may not be the lowest, but you might still be able to leverage discounts to save money on your car insurance. CONNECT by American Family offers a range of discounts for Costco car insurance:

Other potential savings include a good student discount, a student away at school discount and a multi-car discount.

Costco car services

Costco Executive members may receive extra perks like roadside assistance, lifetime renewability and glass repair reimbursement. Through CONNECT by American Family, Costco also offers coverage for motorcycles, classic cars, ATVs, RVs and boats.

Costco home insurance

Costco home insurance policies are more robust than the company’s car insurance offerings and could be a good choice for Costco members looking for customizable coverage. Costco members can choose from a variety of endorsements to customize their policy and fill gaps in coverage. Optional add-ons include coverage for adventure equipment, personal injury, water backup, earthquake and mine subsidence. However, the company still offers fewer endorsements than many of its competitors.

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Costco home insurance cost

Costco home insurance may be cheaper than the national average depending on how much coverage you need. For example, for a policy with $150,000 in dwelling coverage, American Family’s rate is $990 per year (remember that Costco home insurance is sold through CONNECT by American Family). The national average cost of home insurance for that coverage limit is $898 per year.

However, for higher coverage limits, American Family’s rates tend to be lower. Just like with car insurance, though, Costco’s rates are likely to be different from American Family’s, and your personal premium will vary based on your rating factors. You will very likely pay a different amount than these averages.

Dwelling coverage limit Costco average annual premium* National average annual premium
$150,000 $990 $898
$250,000 $1,295 $1,312
$350,000 $1,597 $1,723
$450,000 $1,889 $2,148
*Costco home insurance is underwritten by American Family Insurance Group.

Costco home insurance discounts

CONNECT by American Family offers several discount opportunities for Costco members that purchase home insurance policies, including:

Costco home services

Some additional benefits for Costco’s home insurance include identity theft protection, food spoilage coverage and lock replacement coverage. In addition to home insurance, Costco also offers renters and condo coverage.

Other Costco perks worth considering

In addition to home and auto insurance, CONNECT by American Family also offers the following policies to Costco members:

  • Renters insurance
  • Condo insurance
  • Umbrella insurance
  • ATV insurance
  • Motorcycle insurance
  • RV insurance
  • Boat insurance
  • Classic car insurance
  • Flood insurance

Costco corporate sustainability

As a company, Costco places importance on sustainabilityhuman rights and community action. Costco focuses on sustainability as it relates to their business operations, including using water efficiently, reducing inequalities, protecting marine life and taking action on climate change. The company also thinks about human rights in all steps of the business, from employee rights to the rights of suppliers and those making the materials used in Costco’s products. Finally, Costco focuses on giving back to communities by earmarking 1% of its pre-tax profits for charitable contributions.

Not sure if Costco is right for you? Consider these alternatives

Choosing a home or car insurance company can be a process, and not all companies will fit everyone’s needs. If you aren’t sure if Costco’s CONNECT by American Family coverage is right for you, consider these alternatives:

  • Travelers: If you are looking for a company that offers highly customized coverage, Travelers could be a good choice. The carrier has numerous auto and home endorsements to help you build a policy that fits your unique needs.
  • NationwideNationwide could be a good option if you want to bundle multiple insurance and financial products with one carrier. The company offers a suite of insurance products as well as investment, retirement and banking products.
  • FarmersFarmers offers auto, home and life insurance among other products, and could be a good choice if you value simplicity. The company doesn’t offer as many endorsements as some competitors, but might still edge out Costco in that area.

Methodology

Bankrate utilizes Quadrant Information Services to analyze 2021 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on 40-year-old male and female homeowners with a clean claim history, good credit and the following coverage limits:

Auto

  • $100,000 bodily injury liability per person
  • $300,000 bodily injury liability per accident
  • $50,000 property damage liability per accident
  • $100,000 uninsured motorist bodily injury per person
  • $300,000 uninsured motorist bodily injury per accident
  • $500 collision deductible
  • $500 comprehensive deductible

To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our sample drivers own a 2019 Toyota Camry, commute five days a week and drive 12,000 miles annually.

Age: Rates were calculated by evaluating our base profile with the ages 18-60 (base: 40 years) applied. Depending on age, drivers may be a renter or homeowner. Age is not a contributing rating factor in Hawaii and Massachusetts.

Incidents: Rates were calculated by evaluating our base profile with the following incidents applied: clean record (base), single speeding ticket and single at-fault accident.

Homeowners

  • Coverage A, Dwelling: $150,000, $250,000, $350,000, $450,000
  • Coverage B, Other Structures: $15,000, $25,000, $35,000, $45,000
  • Coverage C, Personal Property: $75,000, $125,000, $175,000, $225,000
  • Coverage D, Loss of Use: $30,000, $50,000, $70,000, $90,000
  • Coverage E, Liability: $300,000
  • Coverage F, Medical Payments: $1,000

The homeowners also have a $1,000 deductible and a separate wind and hail deductible (if required).

These are sample rates and should be used for comparative purposes only. Your quotes will differ.

Bankrate Scores

Bankrate Scores primarily reflect a weighted rank of industry-standard ratings for financial strength and customer experience in addition to analysis of quoted annual premiums from Quadrant Information Services, spanning all 50 states and Washington, D.C. We know it is important for drivers and homeowners to be confident their financial protection covers the likeliest risks, is priced competitively and is provided by a financially-sound company with a history of positive customer support.

To determine how well the best car and home insurance companies satisfy these priorities, third-party agency ratings from J.D. PowerAM BestS&PNAIC, and Moody’s had the most impact on the companies’ Bankrate Scores. As price is a common consideration for drivers and homeowners, we analyzed quoted premiums based on 40-year-old male and female drivers with a 2019 Toyota Camry, as well as 40-year-old male and female homeowners with $250,000 in dwelling coverage. This profile, assessed across more than 35,000 ZIP codes in the U.S., provided a basis on which drivers and homeowners may compare each provider.

While coverage options, insurer availability, affordability and customer experience are often the top priorities, Bankrate also analyzed each insurer’s online and mobile resources for policy management and claims handling. Insurance is rapidly evolving to keep pace with our digital world, so these aspects also carried weight in determining Bankrate Scores.

*Costco car and home insurance is sold through CONNECT by American Family; Bankrate Score displayed is for American Family. 

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