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Costco insurance review 2024

Updated Jul 01, 2024
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At a glance

BANKRATE'S TAKE 

Policyholders who value unique home insurance benefits over robust car insurance policies and are also members of Costco might consider Costco insurance as their company of choice.

Purchasing Costco insurance may be a good idea for Executive Members with fairly straightforward coverage needs.  

New

What’s new with Costco?

In early 2023, Costco stopped selling home and auto insurance policies in California, adding to the list of insurers limiting coverage in the Golden State.

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Costco car insurance

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 through CONNECT, powered by American Family

Costco’s car insurance policies are relatively basic, and personalization options are sparse, so Costco car insurance may be a good fit for someone looking for a simple auto policy. In addition to the standard coverage types you would expect with a major car insurance company, Costco car policies also offer gap insurance and new car replacement on eligible vehicles. To be eligible to purchase a Costco insurance policy, you must be a Costco member. Currently, Costco coverage is available in 43 states and Washington, D.C.

In addition to exclusive discounts reserved for Costco members, Costco Executive Members may get extra peace of mind through a lifetime renewability benefit offered on eligible Costco auto policies, as well as roadside assistance.

Pros and cons of Costco car insurance

When requesting car insurance quotes, it can be hard to differentiate one company from the next. Creating a list of pros and cons for Costco auto insurance could offer a helpful visual representation of how the carrier stacks up, and it may also help you determine where your priorities lay regarding your auto policy.

Pros
  • Costco members may find it convenient to purchase their insurance where they shop for other items

  • Gap insurance is offered

  • Claims agents are available 24/7

Cons
  • Few endorsements are available

  • No mobile app

  • Higher-than-baseline amount of NAIC complaints regarding auto policies

Costco car insurance cost

While specific car insurance rates for Costco auto insurance are not publicly available, understanding national averages can provide context. On average, full coverage car insurance costs about $2,278 per year or $190 monthly, and minimum coverage averages around $621 annually or $52 monthly. For a personalized estimate that reflects your unique situation, contact a Costco auto insurance agent.

Costco car insurance discounts

In addition to an exclusive discount for Costco members, CONNECT offers a few other unique discount opportunities that may help you save on your car insurance, including:

  • Garaging discount: If you keep your cars in a garage overnight, you may be eligible for a discount.
  • Tenure discount: Hitting time-related milestones might get you a cheaper premium than what CONNECT would offer to a new customer.
  • Good student discount: This discount recognizes academic achievement for full-time students meeting certain qualifications, potentially reducing the cost of coverage.
  • Student away discount: If your student lives at school more than 100 miles away from home, you could earn a discount (as long as your student doesn’t have a vehicle with them at school).
  • Defensive driver discount: Taking a DMV-approved defensive driver course and presenting your completion certificate to CONNECT could net you some savings.
  • Multi-car and multi-product discounts: Insuring multiple vehicles with CONNECT may entitle you to a multi-car discount. Bundling different insurance types, like auto with homeowners or umbrella policies, could also lead to discounts that reward you for consolidating your insurance needs with CONNECT.
  • Premier safety discount: For those with spotless driving records over the past four years, this discount rewards safe driving habits.
  • Vehicle safety features: Discounts may be available for vehicles equipped with safety features such as anti-lock brakes, airbags, automatic seatbelts and anti-theft devices.
  • Defensive driver discount: Completing an approved "refresher" driving course could earn you a discount, acknowledging your commitment to safe driving.

Keep in mind that discount eligibility varies depending on the state you live in. If you are concerned with price and need the cheapest car insurance company, you may want to contact Costco car insurance for a quote and to see which discounts apply to you.

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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 personalize their policy and fill in coverage gaps. Optional add-ons include coverage for adventure equipment, personal injury, water backup, earthquake and mine subsidence.

Pros and cons of Costco homeowners insurance

If you’re shopping for the best homeowners insurance company, you may want to consider the perks and drawbacks of Costco’s offerings to get a holistic view of the insurer.

Pros
  • Unique endorsements available that may not be offered by other companies

  • Wildfire loss prevention may be included at no additional cost in certain states

  • CONNECT offers exclusive homeowners benefits for Costco executive members

Cons
  • CONNECT homeowners insurance not rated by J.D. Power

  • No live chat

  • Not as many discounts as some competitors

Costco home insurance cost

While specific premium data for Costco home insurance is not publicly available, understanding how insurance costs are calculated can be helpful. The national average for home insurance, according to data from Quadrant Information Services, stands at approximately $2,230 per year, or around $186 per month, for a policy with $300,000 in dwelling coverage. This benchmark can serve as a useful comparison when evaluating the potential cost of Costco's home insurance. Various factors influence home insurance rates, and seeing where Costco's rates fall in comparison to this national average may assist in determining the most suitable rate for your needs.

Costco home insurance discounts

Shoppers looking for the cheapest homeowners insurance company may be interested in the following Costco home insurance discounts offered by CONNECT:

  • Age of home discount: New homes may qualify for a discount, since newer homes may be at less risk for damage.
  • Renovation discount: If you replace your roof, update your heating and cooling system, renovate your electrical system or redo your plumbing, you might save money on Costco home insurance.
  • Tenure discount: Just like with auto insurance, if you keep your home insurance policy with Costco for several years, you could earn a discount.
  • Home protection discounts: You may earn a discount if you have smoke alarms, a professional monitoring system, a video doorbell or other protection devices installed in your home.
  • Claims-free discount: If you haven't filed a claim in the last five years, you may be eligible for a discount in some states.
  • Multi-product discounts: Bundling your home insurance with other policies like auto or umbrella insurance through CONNECT might lead to additional discounts.

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Costco life insurance

Like its auto and home insurance, Costco life insurance is not written through Costco itself. Instead, Costco has partnered with insurance company Protective to offer Member Advantage Life Term policies, at around 15 percent savings for Costco members compared to the general life insurance product market. However, only term life is available, with two term limit options (10 or 20 years). With this in mind, Costco life insurance through Protective may be best for those looking for a cheap life insurance policy with little-to-no frills.

Pros and cons of Costco life insurance

Pros
  • Costco members get exclusive access to a Protective Member Advantage Life Term policy

  • Policy may be a good choice for those new to life insurance, since few options are available

  • Some optional riders may be included at no additional cost

Cons

Costco life insurance endorsements

Endorsement options can be important for those looking for the best life insurance company. Luckily, Protective Life offers a few add-ons that could be of interest, including:

  • Accidental death benefit rider: This option can provide a higher death benefit payout if you pass away due to an accident.
  • Children’s term life insurance rider: Parents may consider adding this rider to provide life insurance protection for their children, which the child could then convert into their own policy once they reach the age of 25.
  • Income provider option endorsement: Including this endorsement (offered at no additional charge) will split your death benefit payout into payments rather than paying it as a lump sum.
  • Terminal illness accelerated death benefit endorsement: If you’re diagnosed with a terminal illness, this endorsement would allow you to access up to 60 percent of your death benefit (or $1 million, whichever is less) before you pass. In eligible states, this endorsement is included at no additional cost.
  • Waiver of premium rider: If you become disabled, this rider may waive your life insurance premium.

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Compare Costco with other insurers

Bankrate’s Costco insurance review may be your first stop in trying to determine if this company can meet your needs. Remember that you’d need to be a member of Costco to be eligible for coverage. If you are eligible, it may still be worth requesting quotes from some comparable alternatives below before settling if Costco insurance is right for you. 

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Travelers

Travelers
Rating: 4.2 stars out of 5
4.2
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Cost & ratings

Rating: 4.1 stars out of 5
4.1

Coverage

Rating: 4.2 stars out of 5
4.2

Support

Rating: 4.4 stars out of 5
4.4

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Nationwide
Rating: 4.2 stars out of 5
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Cost & ratings

Rating: 4.3 stars out of 5
4.3

Coverage

Rating: 3.9 stars out of 5
3.9

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Rating: 4.2 stars out of 5
4.2
OVERVIEW
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If you are looking for a company that offers highly personalized 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.
STANDOUT FEATURES
Info
Dollar Reload
Hybrid/electric car discount
Badge
New car replacement endorsement
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Travelers Affinity offers special rates
AVG FULL COV. AUTO RATE
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$1,909
J.D. POWER AUTO SCORE
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868/1000
AVG HOME RATE
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$1,681
J.D. POWER HOME SCORE
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812/1000
AM BEST RATING
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A+(Superior)

Is Costco a good insurance company?

Bankrate’s insurance editorial team includes licensed agents with real-world agency experience. We understand the research required to find the best insurance company that ticks your boxes. Our goal is to give you relevant information to help you feel empowered during your insurance shopping journey.

Whether or not Costco insurance is a good company depends on your needs. If you aren’t already a member of Costco (or don’t plan on becoming a member soon), Costco insurance might not be a viable option. However, if you are a Costco member — as well as an Executive member (as you get extra perks) — it could be worth exploring Costco insurance, especially if you’re looking for unique homeowners insurance benefits.

Costco Insurance customer satisfaction

For many people, customer satisfaction is just as important as cheap insurance rates. To evaluate this metric, Bankrate reviews several third-party scores, including J.D. Power scores. Costco insurance is offered through CONNECT, powered by American Family. American Family's AM Best financial strength rating indicates a positive history of delivering on claim payouts.

CONNECT was not scored in the 2023 J.D. Power Digital Experience Survey, so we cannot definitively evaluate the online quotes or claims filing processes. CONNECT was only included in one region (California) of the 2023 J.D. Power U.S. Auto Insurance Study. It earned second place in California for overall customer satisfaction, scoring 839 out of 1,000. However, Costco Insurance does not sell home or auto policies in California. CONNECT was not scored in the most recent Auto Claims Satisfaction Study. CONNECT was not included in J.D Power's most recent home or auto claims satisfaction surveys.

Study or Rating Agency CONNECT Industry average
2023 J.D. Power Digital Experience Study - Service Not scored 702/1,000
2023 J.D. Power Digital Experience Study - Shopping Not scored 521/1,000
AM Best rating A (Excellent) N/A

Costco customer complains 

In addition to J.D. Power scores, we also analyzed where insurance companies fall on the National Association of Insurance Commissioners (NAIC) Complaint Index. The NAIC keeps track of how many complaints it receives about a company and separates these complaints by insurance policy type. It then issues an index score to help consumers visualize how many complaints a company gets compared to other companies of similar size. The average (or baseline) amount of complaints is 1.00. A score higher than that means that the company receives more complaints than average and vice versa.

In contrast to its high J.D. Power score, according to the NAIC, CONNECT receives more complaints than baseline about its private passenger auto insurance. In light of this, drivers who prioritize customer service may want to do further research before switching to Costco car insurance.

CONNECT's NAIC complaint index data for its home insurance product is less favorable than  its auto product. The insurer received more  complaints than expected against its home insurance in 2022 at a score of 1.41.

Other Costco tools and benefits

While you search for the best car insurance company, you may want to consider the following products and perks that CONNECT offers to Costco members:

  • Specialty insurance: CONNECT offers specialty insurance for motorcycles, classic cars, ATVS, RVs and boats is available for Costco members.
  • Commercial insurance: CONNECT offers Costco members insurance that is tailored for business use, such as commercial auto policies and business owner policies. 
  • Umbrella insurance: Umbrella insurance provides extra liability protection above what you carry on your homeowners and auto policy. 
  • Customer portal: Policyholders can make changes to their policy, pay bills, request ID cards and more with CONNECT’s full-service full-service online customer portal.
  • Glass deductible waiver: Your car insurance deductible may be waived if you get a chip in your windshield that can be repaired without replacing the entire windshield. 
  • Accident Travel Expense coverage: This one may be particularly helpful to frequent road trippers. If you get into an accident that renders your car undrivable and you are more than 100 miles from home, this coverage can help with your out-of-pocket accommodation or travel expenses.

Frequently asked questions about Costco

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Written by
Natalie Todoroff
Writer, Insurance
Natalie Todoroff is an insurance writer for Bankrate, prior to which she wrote for a popular insurance comparison shopping app. She has a Bachelor of Arts in English and has written over 800 articles about insurance throughout her career.
Edited by Senior Editor, Insurance