Geico vs Costco

Established in 1936, Geico holds a 13.8 percent share of the auto insurance market share. It provides standard coverage policies and perks for everyday drivers, and operates nationwide. Geico also extends its insurance offerings beyond auto insurance. However, the company doesn’t underwrite these policies directly; instead, it works with various insurance companies for underwriting.

Founded in 1976, Costco offers discounted car insurance in 44 states and Washington, D.C. through a partnership with American Family. American Family, holding a 2.1 percent share of the private passenger auto insurance market, underwrites Costco’s auto policies through its subsidiary CONNECT. Costco’s car insurance partnership includes typical coverage options and requires membership for coverage discount eligibility. If you’re deciding whether to go with Costco or Geico for coverage, Bankrate’s in-depth comparison can help.

• Bankrate Score methodology

  Our 2024 Bankrate Score considers variables our insurance editorial team determined impacts policyholders’ experiences with an insurance company. These rating factors include a robust assessment of each company’s product availability, financial strength ratings, online capabilities and customer and claims support accessibility. Each factor was added to a category, and these categories were weighted in a tiered approach to analyze how companies perform in key customer-impacting categories.Each category was assigned a metric to determine performance, and the weighted sum adds up to a company’s total Bankrate Score — out of 5 points. Our scoring model provides a comprehensive view, indicating when companies excel across several key areas and highlight where they fall short.

  • Tier 1 (Cost & ratings): To determine how well auto and home insurance companies satisfy these priorities, average quoted premiums from Quadrant Information Services (if available), as well as any of the latest third-party agency ratings from J.D. Power, AM Best, Demotech and the NAIC, were analyzed.
  • Tier 2 (Coverage & savings): We assessed companies’ coverage options and availability to help policyholders find a provider that balances cost with coverage. Additionally, we evaluated each company’s discount options listed on its website.
  • Tier 3 (Support): To encompass the many ways an auto insurance company can support policyholders, we analyzed avenues of customer accessibility along with community support. This analysis incorporated additional financial strength ratings from S&P and Moody’s and factored a company’s corporate sustainability efforts.

  Tier scores are unweighted to show the company’s true score in each category out of a possible five points.

Geico vs. Costco comparison

When comparing Geico vs. Costco for auto insurance, it may be helpful to weigh a number of different variables. For instance, discounts, coverage options, average rates for different incidents and unique incentives can all be worth considering. It may also be helpful to consider the unique pros and cons for each provider to determine which may be the best fit for your needs.

Geico pros and cons

Costco pros and cons

Is Geico cheaper than Costco?

Average rate data for Costco members is not available, making it difficult to compare Geico and Costco’s average costs for car insurance. It may instead be helpful to compare the 2023 national average costs of car insurance against Geico’s average car insurance rates to find out how they stack up. Based on our comparison of average rate data from Quadrant Information Services, Geico generally has lower averages for both full and minimum coverage policies compared to the national average.

Geico is generally cheaper for drivers with poor credit

Not all states allow insurance companies to consider credit scores when calculating car insurance rates. In particular, California, Hawaii, Maryland, Massachusetts and Michigan outlaw the use of credit-based insurance scores to determine rates. In other states, credit scores can impact the cost of car insurance. When compared to the national average, Geico has lower average rates by credit score in each category.

• Rates by credit score methodology

  Rates were calculated based on the following insurance credit tiers assigned to our drivers: “poor, average, good (base) and excellent.” Insurance credit tiers factor in your official credit scores but are not dependent on that variable alone. Four states prohibit the use of credit-based insurance scores as a rating factor in determining auto insurance rates: California, Hawaii, Massachusetts and Michigan.

Geico is generally cheaper for young drivers

Younger drivers have less experience behind the wheel, which means that they are statistically more likely to get into an accident on the road. In turn, young drivers tend to pay the highest average rates for car insurance in most states to compensate for the higher risk of insuring them. When compared to the national average, Geico’s average rates tend to be lower for young drivers in several age groups.

*Rates for young drivers on their parent’s policy

• Rates by age (young drivers) methodology

  The rates displayed reflect the total cost of a 16- through 20-year-old driver added to their parents’ policy. Age is not a contributing rating factor in Hawaii and Massachusetts due to state regulations.

Geico is generally cheaper for adult drivers

Average car insurance rates tend to go down for drivers as they get older and gain more experience behind the wheel. Compared to the national average, Geico tends to offer lower average rates for adult drivers.

*Rates are for drivers on their own policy.

• Rates by age (adult drivers) methodology

  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 due to state regulations.

Geico is generally cheaper for high-risk drivers

Speeding tickets, accidents and other incidents can have a significant impact on the cost of car insurance. Compared to national average rates, Geico generally offers lower average rates for high-risk drivers. While average DUI rates are outlined below, it’s important to note that not all companies will offer coverage to drivers with a DUI on their record.

• Rates by driving record methodology

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

Geico vs. Costco: Discounts

Both Geico and Costco offer car insurance discounts that can help drivers save money on their auto policy. However, each provider offers unique discounts. Here are the discounts you can get through Costco auto insurance vs. Geico:

Geico unique discounts

• Federal employee discount: Geico is one of the few insurance companies that offers a potential discount for federal government employees.
• Military discount: Geico customers who are active duty military service members may qualify for a discount.
• Membership/employee discount: Drivers may get a discount on their Geico policy if they belong to certain membership groups or work for a participating employer.

Costco unique discounts

• Premier safety discount: Drivers who have a perfect record with no traffic violations, accidents or claims within the past four years may qualify for a discount.
• Garaging discount: If you keep your car in a garage when it is not in use, Connect may give you a lower premium.
• Education discount: Connect offers potential savings for students who complete a four-year degree program. This also applies to students who are insured on their parent’s policy.

Geico vs. Costco: Customer experience comparison

Geico and Costco’s Connect by American Family both offer an online experience with websites that include information about coverage options and discounts, as well as online quote tools and support for online claims. Geico also offers a mobile app that allows policyholders to manage their policy, file claims, make payments and more. If you have Costco insurance, you can only manage your policy online.

Frequently asked questions

• • Do Geico and Costco offer homeowners insurance?

    Both companies offer home insurance policies, but neither company underwrites its homeowners policies. American Family underwrites the homeowners insurance policies sold by Costco. Geico, on the other hand, works with several insurance companies, and the companies you may work with will depend on your location.

  • What is the best car insurance company?

    The best car insurance company is different for every driver. Some car insurance carriers are known for low premiums, some are great for customer service and others stand out for their coverage options. The only way to find the best company for you is to shop around and compare providers using your own criteria.

  • How much does car insurance cost?

    In the United States, the 2023 average cost of car insurance is $2,014 per year for a full coverage policy. However, auto insurance premiums are personalized based on factors like your age, state, credit score (in most states), driving history and the type of car you have.

  • Is car insurance legally required?

    Yes, car insurance is legally required in almost every state. In New Hampshire, drivers can opt out of car insurance unless they need an SR-22 while Virginia drivers can pay an uninsured motorist fee in lieu of purchasing car insurance. In many states, you also have the ability to satisfy financial responsibility in other ways, like securing a bond.

  • Do I have to be a Costco member to get Costco car insurance?

    You do have to maintain a Costco membership in order to sign up for Costco’s car insurance offerings, which is underwritten by American Family. Costco membership typically costs $60 per year, and you will have to maintain that membership in order to continue getting auto insurance through Costco.