Costco Car Insurance Review


Pros Explained

  • Multiple policy discounts: Costco car insurance offers a number of discounts to customers based on their loyalty, good driving habits, education, and vehicle safety features.
  • Additional benefits for Costco Executive members: Costco Executive members receive additional benefits at no extra charge. These perks include lifetime renewability, home lockout assistance, and roadside assistance.
  • Choose your own body shop for repairs: After an accident, customers can choose any body shop they want to complete the repairs. Customers are not required to select a body shop from a list provided by the insurance company.

Cons Explained

  • High customer complaint ratio: According to the National Association of Insurance Commissioners (NAIC), Costco auto insurance received four times as many complaints as expected for a company of its size.
  • Car insurance through a third party: Costco car insurance is provided by CONNECT, a division of American Family Insurance. When dealing with a third party, you are not guaranteed the same level of service you expect from Costco.
  • Limited customer service hours: Live agents are not available 24/7. To speak with one, you must call between 7 a.m. and 10 p.m. CST Monday through Friday or between 8:30 a.m. and 7 p.m. CST on Saturday. The call center is closed on Sundays and on most holidays.


Costco Car Insurance Coverage

Costco auto insurance offers coverage for liability, medical, uninsured and underinsured motorist, vehicle, and more.

Liability Coverage

Liability coverage includes:

  • Bodily injury insurance: This pays for claims if you injure someone in an auto accident and are found to be at fault.
  • Property damage insurance: This covers the damage your vehicle caused to another vehicle or property. It does not cover damage to your own vehicle.

Medical Coverage

Medical coverage includes:

  • Medical expense insurance: This covers the cost of all necessary medical expenses after an automobile accident, regardless of who is at fault. The driver, their spouse, relatives living in the household, and anyone occupying a vehicle on your policy are covered in case of an accident.
  • Personal Injury Protection (PIP) insurance: PIP insurance covers you, anyone living in your household, your passengers, and pedestrians that are injured or killed in an accident.

Uninsured and Underinsured Motorist Coverage

Uninsured and underinsured motorist coverage protects you and your vehicle when you are in an accident that is not your fault and the other driver either does not have insurance at all or their insurance does not cover all of the damage. A 2021 study by the Insurance Research Council found that one in eight drivers does not have insurance, so purchasing this coverage may be a good idea.

Vehicle Coverage

There are two parts of vehicle coverage:

  • Collision: Your vehicle is covered for damage caused by a collision with another vehicle or object, whether it is your fault or not.
  • Comprehensive: This covers damage to your vehicle that you have no control over, such as break-ins, animal strikes, or natural disasters.

By increasing the deductibles on your insurance coverage, you can reduce your annual premiums.

Additional Coverage

Costco auto insurance also offers the following optional coverages for your vehicle:

  • Accident travel expense coverage: When you’re in an accident more than 100 miles from home and your car is disabled, this coverage helps with your out-of-pocket expenses for travel or accommodation.
  • Gap insurance: This coverage, also known as “guaranteed auto protection” insurance, pays the difference between the value of your vehicle and the amount of your original loan in the event of a loss. This coverage extends to 120% of your vehicle’s value. It includes new car replacement coverage for the first year, then gap protection for the next two years.
  • Glass repair deductible waiver: This coverage is included with all auto insurance policies for no additional cost and covers windshield repairs without paying a deductible. However, windshield replacement is not covered.
  • New car replacement coverage: During the first year of ownership (or first 15,000 miles), if your vehicle is a total loss, you can replace it with the same make and model at a total price of up to 110% of the manufacturer’s suggested retail price.
  • Rental car insurance: This pays for daily rental charges if you need to rent a vehicle following an accident. Coverage is capped at the specific dollar amount that you select.
  • Roadside assistance and towing: This covers the cost of towing to a repair shop, as well as labor costs performed where your car has been disabled. This labor includes changing a flat, replacing a dead battery, and freeing your car from being stuck in the snow.
  • Stolen key coverage: Comprehensive insurance policyholders receive stolen key coverage at no extra cost. This benefit replaces the locks on your vehicle if your key is stolen. There is no deductible due if the cost is less than $250.

Factors That Affect Your Premiums

Many factors determine the cost of insurance coverage, and not all companies treat them the same. They include:

  • Age: More experienced drivers tend to have fewer accidents, therefore they pay less for auto insurance. New drivers and those under 25 years old tend to pay higher rates.
  • Gender: Women tend to have fewer accidents and DUIs, and the accidents that they do have are less serious than those that men have, so their insurance premiums are lower.
  • Car use: The number of miles you drive and what your car is used for—leisure, commuting, work—determines your rates. The more you drive, the likelier it is that you’ll be involved in an accident. Occasional drivers pay the least.
  • Location: Urban drivers pay more than suburban and rural drivers due to the increased chance of accidents, break-ins, and other damage.
  • Vehicle: The cost of your vehicle is a major factor in insurance premiums. The likelihood of theft, cost of repairs, engine size, and overall safety record also factor into your rates.


Costco Car Insurance Discounts

These discounts can lower premiums for Costco auto insurance customers.

Vehicle Equipment

  • Antilock brakes: This vehicle feature rapidly pumps your brakes when you slam on the pedal to avoid your brakes locking, so you can remain in control of your vehicle.
  • Airbags: Airbags deploy in the event of an accident to protect the driver and passengers in the vehicle.
  • Automatic seat belts: Automatic seat belts are self-activated to ensure that passengers are wearing a seatbelt when the vehicle is in motion.
  • Anti-theft devices: Vehicle alarms, tracking devices, and other anti-theft devices protect the vehicle and make it less likely to be targeted by thieves.

Driving History and Habits

  • Garaging discount: When you park your vehicle in a garage, a discount may apply, as it receives added protection when not in use.
  • Good driver discount: Safe driving habits can help reduce your premiums. This discount is only available in California. However, the Costco Insurance Agency is currently not offering new auto or home insurance policies in California.
  • Premier safety discount: When all insured drivers have spotless driving records for the last four years, you’ll receive a discount on your insurance.

Driver Education

  • Defensive driver discount: Taking a refresher driving course from your state’s Department of Motor Vehicles (DMV) or an accredited organization will earn you a discount on your policy.
  • Education discount: Students who complete at least four years of post-secondary education may be eligible for a discount.
  • Good student discount: Full-time students are eligible for a discount when they maintain high levels of academic achievement.
  • Student away discount: Students who go away to school more than 100 miles from home may receive a discount when they don’t drive a vehicle regularly. This discount does not apply if the student has a vehicle at school.

Customer Loyalty

  • Auto and home bundle: Customers who bundle their home or condo policy with Costco car insurance will save money on their policies.
  • Auto and umbrella bundle: If you purchase an umbrella policy, you’ll receive a discount on your car insurance.
  • Auto, home, and umbrella bundle: You’ll receive an even bigger discount when you purchase all three policies from Costco auto insurance.
  • Multiple vehicle discount: When you insure more than one car on one policy, you may be entitled to a discount.
  • Tenure discount: Customers who reach certain time-related milestones will receive lower rates on their policies.


Costco Car Insurance Availability

Costco car insurance is available through CONNECT, a division of American Family Insurance. You can purchase insurance directly from CONNECT, but some discounts and group pricing for Costco members may not be available. Coverage limits, discounts, and payment options can vary by state.

Insurance coverage is not available in all states. Costco Insurance Agency is not licensed in New York state, so customers who live there cannot obtain insurance through Costco. Additionally, residents of Tennessee are not eligible for Costco discounts, and Massachusetts residents must be Costco Executive members to receive Costco discounts. Costco Insurance Agency is currently not offering new auto or home insurance policies in California.


Costco Customer Service

Customer service for Costco car insurance is available by phone, email, and mail. Customer service agents are on call from 7 a.m. to 10 p.m. CST Mondays through Fridays and between 8:30 a.m. and 7 p.m. CST on Saturdays. The call center is closed on Sundays and on most holidays.

Many customer service needs can be handled online through the CONNECT website, such as adding or removing drivers or vehicles, changing your address, and updating your education level. Additionally, CONNECT offers “quick services” that handle the most common tasks without logging in to your account, such as updating payment information and requesting a copy of your policy or auto ID card.

CONNECT’s parent company, American Family Insurance, has a strong reputation in the insurance industry. AM Best, a credit rating agency for the insurance industry, gave American Family Insurance an A (Excellent) financial strength rating, the third highest out of 13 ratings. AM Best’s financial strength rating measures the company’s stability and ability to meet its financial obligations to policyholders. A company with a high rating can be relied upon to pay claims on its policies.

In J.D. Power’s 2022 U.S. Auto Claims Satisfaction Study, American Family Insurance’s overall customer satisfaction was ranked just above the industry average with a score of 874 out of 1,000.

Complaint Index

The National Association of Insurance Commissioners (NAIC) maintains a database of all complaints received about insurance companies. The NAIC publishes ratios comparing the company’s share of complaints versus its share of premiums.

The average insurance company has a complaint index of 1.0. Anything above 1.0 indicates that the company has more complaints than average, while a score below 1.0 indicates the reverse. A score of 2.0 means that the company has twice the number of complaints as expected for a company of its size in the market. For 2022, American Family Insurance CONNECT’s complaint ratio was 4.74. However, it’s worth noting that the company received a total of five complaints, so its small size contributes to the higher ratio.

Other Insurance Provided by Costco

In addition to providing auto and home policies for Costco members, CONNECT offers the following types of insurance coverage:


How to Make a Car Insurance Claim With Costco

You can make a claim 24 hours a day, seven days a week on your Costco car insurance policy by calling 888-404-5365. Certain types of losses may also be reported online. To report a claim, you will be asked to answer these questions:

  • What is your name, address, and policy number?
  • Who was involved?
  • What happened?
  • When did it happen?
  • What was damaged?
  • Were there injuries?

After you provide this information, you’ll be assigned a claims adjuster. This person will confirm your coverage, deductible, and facts of the loss. The adjuster may ask you to provide before and after photos, a police report (if one was filed), and medical authorization forms.

To repair your vehicle, you can choose your own body shop or, if you need it, Costco auto insurance may help you find one. The repairs will begin as soon as your auto insurance claim has been processed.


Costco Car Insurance Cancellation Policy

To cancel your policy, follow these steps:

  1. Call customer service at 888-404-5365 during its hours of operation.
  2. When prompted by the automated system, dial 1 to service an existing policy.
  3. Be ready to provide the telephone agent with your auto insurance policy number.


Get a Costco Car Insurance Quote

To price out Costco auto insurance, you can call 855-531-9253 or request a quote online at the Costco website. Requesting a quote online is a popular option because you can change coverages and deductibles quickly to see how they affect premiums.

Be prepared to provide the following information to receive your quote:

  • Name
  • Address
  • Make, model, and vehicle identification number (VIN) (car may automatically populate based on public records)
  • Insurance coverage amounts and deductibles
  • Vehicle discounts (airbags and anti-theft device)
  • Where you keep your vehicle
  • Vehicle use
  • Miles driven one way to work or regular travel
  • Number of days driven per week for work or regular travel
  • Additional drivers or vehicles
  • Date of birth
  • Email address
  • Gender
  • Current license status
  • Age first licensed in the U.S.
  • Which vehicle you drive most often
  • Marital status
  • Accidents, claims, and violations in the last six years
  • Current auto insurance provider
  • Whether you own or rent your residence
  • Whether you currently have or plan in the future to have a homeowner, condo, or renter’s policy with CONNECT
  • How you heard about Costco car insurance
  • Reference number (optional)
  • Whether you have an active account with Ameriprise Financial
  • Effective date of the new auto insurance policy


Compare Other Car Insurance Reviews

Although Costco members may receive certain discounts and benefits from CONNECT, an American Family Insurance company, these companies are separate from Costco and may not provide the same level of service. Before purchasing a policy, obtain quotes from several car insurance providers to find the right coverage for your situation and a price that fits your budget.


Final Verdict

Costco members receive additional perks and discounts through the Costco car insurance program. To date, more than 500,000 Costco customers have switched their home and auto insurance to CONNECT. Plus, nearly nine out of 10 Costco members renew their policy, which indicates a high satisfaction rate among policyholders.

You can get a quote and purchase your policy online or over the phone. However, once your policy is in effect, limited customer service hours may frustrate some customers. Between CONNECT and its parent company, American Family Insurance, Costco members have a variety of coverage options to address all of their insurance needs. Partnering with a financially strong insurance company to provide exclusive member benefits makes Costco auto insurance an attractive option for its members.


Frequently Asked Questions

What Insurance Carrier Does Costco Use?

Costco’s auto insurance policies are underwritten by American Family CONNECT, a subsidiary of American Family Insurance.

Is CONNECT Insurance Owned by Costco?

No, Costco does not own CONNECT insurance. Costco has partnered with CONNECT, which is powered by American Family Insurance, in order to provide insurance policies.

Do You Need a Costco Membership for Costco Insurance?

No, you don’t have to be a Costco member to purchase a policy from CONNECT. However, Costco members are eligible for exclusive discounts through CONNECT.

Does Costco Insurance Include Roadside Assistance?

Yes, Costco Executive members receive the added benefit of roadside assistance.



Investopedia is dedicated to furnishing consumers with unbiased, comprehensive reviews of car insurance providers. We reviewed each insurance provider’s coverage options, available discounts, customer services, and satisfaction ratings to ensure that our content helps users make the right insurance decision for their needs.

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