Costco Auto Insurance Review: Cheap Option for Costco Members, but Weak Customer Service

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Costco Auto Insurance Review: Cheap Option for Costco Members, but Weak Customer Service

Exclusive perks and comprehensive features make this insurance worth a look for Costco members who don't prioritize customer service.

Good for

  • Price-conscious shoppers
  • Those who have a Costco Executive Membership
  • People with recent accidents worried about policy cancellation

Bad for

  • Drivers who already have roadside assistance coverage
  • Those who want a personal relationship with an agent

Editor's Rating


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Costco sells auto insurance to members of its buying club, but Costco doesn't actually provide the insurance. Instead, its policies are underwritten by Ameriprise Insurance. Drivers purchasing car insurance through Costco are eligible for a discount off Ameriprise's already-low rates, and they also receive a few minor perks like free roadside assistance. But consumers who prize great customer service from their insurers may want to look elsewhere, as Ameriprise has below-average client support.

Costco Car Insurance: Our Thoughts

Costco's auto insurance policies are typical in many respects. Car insurance coverage is underwritten by Ameriprise, a reputable and longstanding insurance and financial services company. The vehicle insurance rates, discounts and coverages offered by Ameriprise are strong, though not industry-leading, and the company has below-average customer service.

However, depending on your level of Costco membership, you'll get a few special perks in addition to what's available for all Ameriprise customers. All members can expect to get a 5% to 10% discount off Ameriprise's standard auto insurance rates. This only reduces your quote by a few dollars per month, but it typically exceeds the price of a Costco membership. So there's no downside to taking advantage of the discount, especially if you're already a Costco member.

The most compelling perk of Costco insurance is only available to Costco's Executive Membership tier: lifetime policy renewability. If you qualify for this free benefit, Ameriprise will never cancel your policy because you got into too many accidents. This doesn't mean your car insurance rates won't increase after an accident, though, and your policy may still be canceled after a serious infraction like a DUI.

Executive members also get free roadside assistance and a $100 Costco gift card when they sign up for a new policy. Drivers with standard memberships receive a $50 Costco gift card when they sign up.

The rates drivers can expect to receive from Costco and Ameriprise are competitive with other insurance companies. They also offer most of the discounts you'd typically expect, such as for safe driving, bundling your auto and home insurance policies, and staying with Ameriprise for several years. However, drivers may miss out on more forward-thinking discounts and benefits available from other insurers, such as a discount for using a telematic driving tracker.

The biggest drawback to purchasing Costco auto insurance is Ameriprise's middling customer service reviews. They have a disproportionate number of complaints for a company of its size, especially with regards to settlement amounts and claims delays.

Additionally, Costco and Ameriprise don't offer car insurance in Alaska, Louisiana, Maine, North Dakota, Rhode Island or Wyoming. Shoppers in Tennessee are not eligible for Costco's auto rate discount, and only Executive members qualify in Massachusetts.

Costco Insurance Bottom Line: Costco's auto insurance is a good option for current members of the warehouse club and anyone concerned about having their policy canceled after an accident. But Ameriprise's substandard customer service ratings mean that if you can find a comparable rate elsewhere, you might be better off going with another option.

Costco Auto Insurance Benefits and Discounts

Drivers purchasing insurance from Costco are eligible for a few special benefits exclusive to Costco members, in addition to the discount they receive on their premiums. Gold Star and Business members receive a $50 Costco gift card when they sign up for insurance through Ameriprise, while Executive members get one worth $100.

Executive members also get two additional perks: free roadside assistance and a guaranteed option to renew their policies. Typically, insurers have the option not to renew your policy at the end of its term if you commit too many driving infractions. But with this benefit, you'll always have the option to renew your policy from Ameriprise regardless of how many accidents or traffic violations you're involved in. However, Ameriprise can still raise your rates.

One thing to note: Because your car insurance plan is not purchased from Costco, Costco Executive members will not receive 2% of their car insurance premiums back as part of their annual 2% reward.

Ameriprise Car Insurance Benefits and Discounts

Drivers who purchase their auto insurance through Costco are also eligible for the benefits and discounts Ameriprise offers to all its drivers. One notable benefit is that Ameriprise waives the deductible for auto glass repair. Another is accident forgiveness, letting otherwise safe drivers prevent one accident from increasing their car insurance rates.

Other discounts available from Ameriprise include the following.

  • Safe Driving Discount: Ameriprise provides several discounts for safe drivers. This includes discounts for three or more years of driving without causing an accident and for taking a defensive driving course.
  • Bundling Discount: If you purchase more than one insurance policy from Ameriprise— whether it's for multiple vehicles or bundling your auto, home and life insurance together—you'll get a reduced rate on all of them.
  • Safety Feature Discount: Cars equipped with modern safety and anti-theft features, such as air bags and alarms, will receive a discount.
  • Longevity Discount: Drivers will get a discount after three years' worth of continuous coverage from Ameriprise.
  • Discounts for Students: Ameriprise lowers your rates if you or someone in your family has completed four years of postsecondary education. And if you're a full-time student under 25 with a "B" grade average or better, you'll get a discount. Ameriprise will also reduce the rates for families with a student living more than 100 miles from home who doesn't have a car.

Costco Insurance Coverages

Automobile insurance from Costco and Ameriprise provides all the most common and required coverages that drivers need, including liability coverage for bodily injury and property damage, collision and comprehensive coverage, and medical payments or personal injury protection.

In addition, Ameriprise provides a few optional coverages drivers can purchase for extra protection:

  • Roadside Assistance and Towing: Covers costs of roadside assistance, like when you have a dead battery, lock your keys in your car or get a flat tire. It covers up to $75 per incident, and it's included if you have a Costco Executive Membership.
  • Gap Insurance: If you have a lease or loan on your car and it is totaled in an accident, gap insurance pays for the difference between what you owe and the replacement cost of the car.
  • Rental Car Reimbursement Coverage: Rental car reimbursement insurance pays for a rental car while your vehicle is being repaired after an accident. It covers up to $30 per day and $900 per incident.

Costco Auto Insurance Quotes

To understand how rates available at Costco compared against other insurance companies, we collected sample quotes for four sample driver profiles. Overall, we found the car insurance rates available to Costco members to be very competitive. Costco and Ameriprise's rates came in the top two out of four for each of our sample profiles. The quotes we received for a 30-year-old couple were particularly impressive: The couple would pay 42% less than average with Costco, and they would even save $305 from the second-cheapest option, GEICO.

Comparison Between Costco Auto Rates and Competitors

We also collected quotes from Ameriprise without Costco's discount applied, to determine how much savings Costco members get by buying through the warehouse club. The differences were modest, with a discount of only 5% to 10% for each of our driving profiles. However, the discount exceeds the cost of a standard Costco membership for all of our drivers, so there's no downside to buying your insurance through Costco rather than from Ameriprise directly. As a result, shoppers already considering Ameriprise can save a bit more by buying their insurance through Costco, even if they have to sign up for a new Costco membership to do so.

Comparison Between Costco Auto Rates and Ameriprise

Costco Auto Insurance Reviews and Ratings

All of the interaction you'll have with your Costco auto insurance will be between you and Ameriprise, from buying your policy to making a claim. So Ameriprise's customer service is what will impact your overall experience the most, not Costco's.

Unfortunately, Ameriprise has substandard reviews when it comes to its customer service. They have a NAIC complaint index of 1.71, meaning they received an above-average number of complaints as compared to the amount of business they write. The most common complaints from consumers related to the amount Ameriprise paid out after an insurance claim and how long it took for the company to pay out the claim.

On the other hand, Ameriprise is highly rated with regards to its financial strength, having received an A "Excellent" rating from A.M. Best. Ameriprise has excellent financial stability, and accordingly it has a very high ability to pay out the claims made. Shoppers shouldn't worry about the longevity of Ameriprise when selecting it as an insurer.

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