Is a Costco car insurance policy is available to you, and if so, is it worth the money? In this article, our team will dive into Costco car insurance reviews, coverage options, perks, and more to help you decide.
Costco does not technically sell auto insurance on its own – it is backed by a larger insurance company. We'll take a look at what this means below, but we also encourage you to get quotes from several of the top auto insurance providers to ensure you couldn't get a better deal directly from a larger company. You can use the easy tool above to start comparing free car insurance quotes.
In this article:
- Costco Car Insurance Overview
- Costco Car Insurance Cost And Discounts
- Coverage From Costco Car Insurance
- Costco Auto Insurance Reviews And Ratings
- Our Take On Costco Car Insurance: 3.5 Stars
- Our Recommended Car Insurance Providers
Costco Car Insurance Overview
Costco car insurance, which is available in 34 states, is part of the company’s discounted offerings called Costco Services, which also provide insurance products such as condo and home insurance, renters insurance, umbrella insurance, specialty insurance, life insurance, health and vision insurance, dental insurance, as well as Costco Travel and payment processing for businesses.
While drivers can purchase car insurance plans through Costco, American Family Insurance is the company that backs those plans. Some sites may state that Ameriprise is the company that backs Costco car insurance, but Ameriprise was bought by American Family in 2019.
American Family is one of the largest auto insurance companies in the U.S., with over 2 percent of the national market share and $5.8 billion premiums written in 2019, according to the National Association of Insurance Commissioners.
Here's a snapshot of the pros and cons of Costco car insurance:
|Costco Car Insurance Pros||Costco Car Insurance Cons|
|Discount reserved for Costco members||Insurance not available in every state|
|Low average premiums||No app for claims or customer service|
|Can call in a claim 24/7||Safe driving discount only in California|
|Extra perks like the Glass Deductible Waiver||No rideshare insurance coverage|
Exclusive Benefits For Costco Members
While any Costco member can get a policy, customers that have a higher-tier membership are eligible for additional benefits:
- Roadside assistance: If you have a Costco Executive membership, your insurance policy will automatically come with roadside assistance coverage.
- Lifetime renewability: Costco Executive Members also receive lifetime renewability, meaning Costco won’t cancel your policy for accidents or moving violations (excluding serious infractions).
Costco Car Insurance Cost And Discounts
Because the cost of car insurance differs from one policyholder to the next, it is hard to say how much a Costco car insurance policy would cost you. While we cannot give you an exact number, Costco claims that members reported saving an average of $615.43 their first year after switching.
To help you understand what goes into calculating the price of a policy, here are some basic factors that are taken into consideration:
- Driving record
- Credit score
- Years of experience driving
- Where you live
- Your age
- The age and mileage of your car
- Previous insurance coverage
- Your claim history
Costco Insurance Cost Estimates
As we mentioned before, American Family backs all of Costco's car insurance policies. Below, we've included cost estimates for American Family in all the states it serves. You may find different rates being a Costco member, however.
The rate estimates below apply to full coverage car insurance for 35-year-old drivers with good credit and driving records.
|State||American Family Annual Cost Estimate||Average Annual Cost Estimate|
Costco Insurance Discounts
Through American Family, Costco offers these discounts to all drivers:
Rewards policyholders simply for being Costco members
Rewards safe drivers (only available in California)
Rewards drivers who've had spotless records for the past four years
Rewards drivers who complete a state-certified defensive driver course
Vehicle Safety Feature
Rewards drivers with vehicles that have safety features like air bags, anti-lock brakes, and automatic seat belts
Rewards drivers who park their vehicles in garages
Rewards students who receive high marks in school
Rewards student drivers that live more than 100 miles away and only drive the car when home for breaks
Rewards drivers who complete at least four years of post-high school education
Rewards drivers who insure multiple cars under one Costco policy
Rewards policyholders who bundle multiple policies together, e.g., homeowners can earn discounts by bundling their home and auto insurance policies
Rewards long-standing customers
Costco Membership Fees
In order to be eligible for Costco insurance, you have to be a member. When considering the cost of Costco car insurance, it is important to include annual membership fees.
- Gold Star: $60 annual membership fee
- Gold Star Executive: $120 annual membership fee
- Business: $60 annual membership fee
- Business Executive: $120 annual membership fee
Coverage From Costco Car Insurance
You can get all standard coverage options with Costco car insurance, including:
- Bodily injury and property damage liability auto insurance
- Collision coverage
- Comprehensive car insurance
- Uninsured/underinsured motorist (UM/UIM)
- Medical payments (MedPay)
- Personal injury protection (PIP)
Additional Coverage Options
These are some add-ons that can be purchased in addition to the standard types of auto insurance:
- New car replacement: If your new car is totaled, this option will pay to replace it with the same model, instead of covering its value at the time of the accident.
- Guaranteed asset protection (GAP) insurance: GAP insurance coverage will pay the difference between your car’s value and the amount you have left on your loan if it is totaled.
- Rental car reimbursement: With this coverage, you can get reimbursed for using a rental car up to the amounts you specify in your policy.
- Roadside assistance: Adding this option to your Costco car insurance policy will cover towing, dead battery assistance, spare tire installation, lockout services, jump-start services, and fluid deliveries.
On top of 24/7 insurance claims reporting by phone and online policy management, all Costco car insurance policies come with these additional perks:
|Costco Car Insurance Perk||Details|
|Glass Repair Deductible Waiver||If your windshield can be repaired instead of replaced, Costco car insurance will cover your glass deductible.|
|Stolen Key Coverage||Comprehensive insurance policies cover stolen keys automatically. Also, if the cost to replace your locks is less than $250, you won’t have to pay a deductible.|
|Accident Travel Expense||If you get into an accident more than 100 miles from home, Costco car insurance coverage will contribute toward your unexpected lodging and travel expenses.|
It should be noted that Costco does not offer an auto insurance app for reporting claims, managing your policy, or viewing your insurance card.
To compare coverage and costs from Costco with other providers, get free quotes using the tool below.
Costco Auto Insurance Reviews And Ratings
To get an idea of Costco car insurance reviews, it helps to understand the ratings of the company that facilitates the coverage, American Family Insurance.
American Family has a fairly good reputation. It has an ‘A’ rating from the Better Business Bureau (BBB) but is not accredited. American Family received an A (Excellent) rating from AM Best, attesting to the company's financial strength.
If you scan for Costco car insurance reviews left on the American Family BBB page, you'll find that many people aren’t satisfied with its service. At the time of publication, there are two five-star ratings, one four-star rating, and the rest are either two- or one-star ratings.
Here are a few examples of Costco car insurance reviews:
"I am a Costco member and have been with [this] insurance for over 7 years. In Nov. 2019, my new truck bumped into an object in a driveway and I filed a claim through Ameriprise. They were quick cutting us a check ... In May 2020, [our] premium increased almost 100 percent."
- Anonymous via BBB
"What this company does is immoral and should be illegal. They sell you a reasonable policy for a reasonable price through Costco and then change your coverage for the worse and up your premium in hopes that you'll either not notice or will change insurers before making a claim"
- Anonymous via BBB
"We have been with Ameriprise Costco for many years, both auto and home insurance. The premium of the auto has been up and down over the years but no big changes, which is why we kept it."
- Liu D. via BBB
According to J.D. Power's 2021 U.S. Auto Claims Satisfaction Survey, American Family Insurance has a better-than-average claims experience. After your claim is settled, you can expect your car insurance rates to rise during your next policy term if you were at fault – a small scratch might be worth repairing outside of your insurance coverage for this reason.
Our Take On Costco Car Insurance: 3.5 Stars
We rate Costco car insurance 3.5 out of 5.0 stars overall. The provider has a long list of discounts but is lacking in coverage, customer service, and technology, and it is not available in every state.
If you’re already a Costco member and are looking for basic insurance without too many frills, Costco car insurance may have a great deal for you. The insurer includes useful perks with every insurance policy, including glass repair, stolen key coverage, and travel accident benefits.
Our Recommended Car Insurance Providers
The great thing about shopping for car insurance is that you can get as many free insurance quotes as you want. We recommend getting at least three, so you have a better idea of what kind of coverage and premiums are available to you. To connect with insurers in your area and get quotes, use the tool below.
We have also done some research on top providers for you. Any of the following companies would be great to check into since they are all at the top of our auto insurance rankings. Plus, they all offer affordable rideshare coverage.
USAA: Best For Military
USAA is the best choice overall if you’re a member of the military, part of a military family, or are a veteran. USAA customers can find some of the cheapest rates in the industry. Plus, they have access to first-rate customer service and a number of discounts. In our review, USAA was the only provider that we rated 4.8 out of 5.0 stars. Read more in our USAA auto insurance review.
Geico: Best Overall
Geico came in second place on our car insurance rankings. We think it’s the best option if you’re ineligible for USAA, and it also gives many drivers great insurance rates. For that and its great customer service, we rate the company 4.6 out of 5.0 stars. Read more in our Geico auto insurance review.
Progressive: Best For High-Risk Drivers
Progressive is our third choice for car insurance, also earning 4.6 out of 5.0 stars. Progressive has a great usage-based option through its Snapshot® app, and its general insurance app is easy to use for managing your account and submitting claims. Read more in our Progressive auto insurance review.
In an effort to provide accurate and unbiased information to consumers, our expert review team collects data from dozens of auto insurance providers to formulate rankings of the best insurers. Companies receive a score in each of the following categories, as well as an overall weighted score out of 5.0 stars.
- Industry Standing: Insurers with strong financial ratings and customer-first business practices receive the highest scores in this category.
- Availability: We consider availability by state as well as exclusions for specific groups of drivers.
- Coverage: This rating is based on types of insurance available, maximum coverage limits, and add-on policies.
- Cost and Discounts: Our research team reviews sample quotes for a variety of drivers in every state. Companies with lower prices and many car insurance discount opportunities receive the best scores.
- Customer Service: We comb through customer reviews and consumer feedback studies from experts like J.D. Power.
- Technology: Auto insurers with mobile apps, advanced online services and telematics are more likely to meet consumer needs.
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