Costco Insurance Review: Auto and Home

Costco Insurance Review: Auto and Home

Exclusive perks and lower than average auto insurance rates make this insurance a good option for Costco members.


Editor's Rating

Costco sells auto and homeowners insurance to its club members through American Family under the brand name CONNECT. Members who purchase insurance through Costco may be eligible for a discount on car insurance rates, along with perks like free roadside assistance. American Family has competitive rates for auto insurance, but has many customer complaints about claims.

Good for
  • Price-conscious drivers
  • Costco Executive Members
  • Drivers with recent accidents worried about policy cancellation
Bad for
  • Homeowners looking for the cheapest rate
  • Shoppers who want a personal relationship with an agent
  • People who prioritize customer service

Costco insurance: our thoughts

Costco insurance bottom line: Costco's auto insurance from American Family is a good option for current members of the warehouse club and anyone concerned about having their policy canceled after an accident. While they have cheap auto insurance rates, its high home insurance rates and mixed customer service ratings mean you might want to consider a different company if you want to bundle.

Costco's auto and home insurance policies are underwritten by American Family Insurance (AmFam), one of the 10 largest insurers in the country.

All Costco members can expect to get a discount off American Family's standard auto and home insurance rates, as well as specific benefits for auto insurance based on your Costco membership tier.

Those with Costco's homeowner insurance can take advantage of glass repair reimbursement and home lockout assistance.

The biggest drawback to purchasing Costco insurance is American Family CONNECT's mixed customer service reviews. It has a disproportionate number of complaints for a company of its size, especially with regards to settlement amounts and claims delays.

The company also has a limited number of agents, with 2,000 team members across the country. In comparison, State Farm employs 19,000 agents nationwide.

Costco auto insurance

Costco auto insurance quotes

Overall, we found the car insurance rates available to Costco members through American Family CONNECT to be very competitive. A minimum-coverage policy costs $634 per year, which is 19% cheaper than the national average, while a full-coverage policy costs $1,755, 15% less expensive than average.

Graph showing Costco car insurance rates versus competitors.

Find the Cheapest Car Insurance Quotes in Your Area

Currently insured?
Minimum liability
Full coverage
With an accident
State Farm$532$1,313$1,633
Costco (AmFam)$634$1,755$2,706

Accident rates were calculated based on a full-coverage policy.

Although American Family does not provide information about the discount it offers Costco members, you may be able to utilize that discount to get even cheaper rates. If you're already considering American Family, you should get a quote and see how much you can save with the Costco discount, as it may be more than the cost of a Costco membership itself.

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 discounted rates.

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

Two things to note:

Costco Executive Members will not receive 2% of their car insurance premiums back as part of their annual 2% reward because policies are not purchased directly through Costco.

Additionally, shoppers in Tennessee are not eligible for Costco's auto rate discount, and only Executive Members qualify in Massachusetts.

American Family car insurance benefits and discounts

Drivers who purchase their auto insurance through Costco are also eligible for the benefits and discounts American Family offers to all of its drivers. One notable benefit is that American Family waives the deductible for windshield repair. Another is accident travel expense coverage, covering your out-of-pocket costs for travel or accommodation if your car is disabled more than 100 miles from home.

Other discounts available from American Family CONNECT include the following:

Safe driving

American Family 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.


If you purchase more than one insurance policy from American Family — 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

Cars equipped with modern safety and anti-theft features, such as air bags and alarms, will receive a discount.


Drivers will get a discount after three years worth of continuous coverage from American Family.


If you're a full-time student under 25 years old with a "B" grade average or better, you'll get a discount from American Family. The company will also reduce the rates for families with a student living more than 100 miles from home who doesn't have a car.

Costco car insurance coverages

Car insurance from Costco and American Family provides all of the most common 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, American Family provides a few optional coverages drivers can purchase for extra protection:

Roadside assistance and towing

Roadside assistance 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 at no extra cost if you have a Costco Executive Membership.

Gap insurance

Gap insurance pays for the difference between what you owe on your lease or auto loan and the replacement cost of the car if it is totalled in an accident.

Rental car reimbursement

Rental car reimbursement 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 homeowners insurance

Costco home insurance quotes

Costco home insurance rates are higher than many of its competitors. The average annual premium is $1,812 nationally, which is 48% more expensive than the cheapest insurer, Nationwide. However, American Family doesn't share information about the Costco member discount, therefore Costco members may be eligible for better rates. The company also offers a number of optional coverages that may make it a good fit for some homeowners.

Graph showing Costco home insurance rates versus competitors.

Find Cheap Homeowners Insurance Quotes in Your Area

Currently insured?
Annual premium
State Farm$1,510
Costco (American Family)$1,812

Costco homeowners insurance benefits and discounts

Costco members receive a number of added benefits from American Family, including:

  • Identity theft protection
  • Check fraud and stolen credit card protection
  • Lock replacement expense protection
  • Food spoilage protection
  • Wildfire loss prevention available in some states

These benefits don't cost extra for Costco members, and claims are not subject to a deductible.

Executive Members also receive glass repair reimbursement, which covers the cost of broken windows up to $1,000 per year, and home lockout assistance at no additional cost.

American Family home insurance discounts

Along with the Costco membership discount, American Family offers homeowners a handful of ways to lower their premium.

Age of home

Automatically added based on the age of your home


Homeowners who have not filed a claim in five years receive a discount

Protective devices

Install smoke alarms, deadbolt alarms, security alarms, sprinkler systems, monitored fire or security systems or fire extinguishers


Replace your roof, heating and cooling system (HVAC), electrical or plumbing system


Bundle your home and auto policies


Automatically added based on the number of years you've been insured with American Family

Availability of discounts depends on the state in which you live.

Costco home insurance coverages

Costco and American Family CONNECT provide all of the standard coverage options that you would expect from a home insurance policy, including:

American Family also has less common optional coverages that can be added on to your base policy.

  • Water backup and sump pump overflow coverage protects your home and belongings from damage due to sewer backup or sump pump failure.
  • Home media equipment coverage expands the electronics coverage included in your basic homeowners policy by $2,500, $5,000 or $10,000 increments to help protect expensive equipment like TVs, cell phones, cameras and home theater systems.
  • Adventure equipment coverage protects bicycles, fishing equipment, golf clubs and skis without needing to appraise or itemize individual items. With this coverage, your equipment is protected against all perils , is not subject to a deductible and you'll receive replacement cost for any damage.

Costco insurance reviews and ratings

Costco insurer ratings

  • NAIC Complaint Index : 1.37
  • AM Best financial strength rating : A (Excellent)
  • J.D. Power claims satisfaction rating 889

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

Unfortunately, American Family has mixed reviews when it comes to its customer service. It has a NAIC Complaint Index of 1.37, meaning it received an above-average number of complaints as compared to the amount of business it writes. The most common complaints from consumers related to the amount American Family paid out after an insurance claim and how long it took for the company to pay out the claim.

On the other hand, American Family CONNECT is highly rated with regards to its financial strength, having received an A or "Excellent" rating from A.M. Best. Shoppers shouldn't worry about the longevity of American Family when selecting it as an insurer.

Frequently asked questions

Does Costco sell auto and home insurance?

Yes. Costco sells auto and home insurance policies managed by CONNECT, which is owned by American Family Insurance. The company acquired Ameriprise Auto and Home Insurance — which previously handled Costco policies — in 2019.

Is Costco insurance cheap?

We found that Costco auto insurance is very competitive when it comes to price. It's cheaper than Geico and Progressive, but more expensive than State Farm. Homeowners insurance from Costco is 8% more expensive than the national average, and $585 per year more than the cheapest insurer we found, Nationwide. However, Costco members receive an extra discount that may make rates more affordable.

Should I buy Costco insurance?

Costco's home and auto insurance policies are fairly affordable and come with lots of coverage options, but we aren't impressed by the service ratings we've seen for American Family, which is the company that manages the policies.


To evaluate the quality of Costco's insurance offerings, we considered cost, coverage options and customer service.

To compare auto insurance quotes, we collected thousands of rates from ZIP codes across the country based on a 30-year-old male with an average credit score and clean driving record who owns a 2015 Honda Civic EX.

For our minimum-coverage policy, we quoted a policy with the minimum required limits in each state.

Quotes for full-coverage insurance and rates after an accident are based on a policy with the following limits:

Bodily injury liability$50,000 per person/$100,000 per accident
Personal injury protection$10,000
Property damage liability$25,000 per accident
Uninsured/underinsured motorist bodily injury$50,000 per person/$100,000 per accident
Comprehensive and collision$500 deductible

To compare home insurance quotes, we collected thousands of quotes from the largest home insurance companies in every state across all 50 states and Washington, D.C. based on the median home age and value for the state. For example, our sample home in New York was built in 1957 and insured for $313,700, while our sample home in Florida was built in 1986 and insured to a value of $215,300. We used median home values to approximate the replacement cost in each state.

ValuePenguin's analysis used insurance rate data from Quadrant Information Services. These rates were publicly sourced from insurer filings and should be used for comparative purposes only — your own quotes may be different.

Our customer service evaluations are in part based on ratings from the National Association of Insurance Commissioners (NAIC), A.M. Best and J.D. Power.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.