Costco Car Insurance Review 2024

Costco car insurance is provided by Connect from American Family. Costco members are eligible for exclusive discounts through Connect, but you don’t have to be a Costco member to purchase a policy from Connect.

Costco car insurance provides standard coverage options and endorsements that can be added to a policy.

What States Does Costco Car Insurance Operate In?

Costco car insurance is available in all states and Washington, D.C. Certain coverage and discounts can vary by state.

Costco isn’t currently selling new car insurance policies in California or Florida.

Connect has a somewhat high level of auto insurance complaints made to state insurance departments across the country. Connect complaints are slightly higher than those of many competitors and also above the industry average.

Connect’s most common auto insurance complaints are related to claim delays, unsatisfactory claim settlement offers and claim denials.

In a survey of collision repair professionals by CRASH Network, Connect’s parent company, American Family, earned only a C+ grade.

The opinions of auto body repair professionals are valuable because they have an insider’s view of insurance companies’ use of lower-quality repair parts, whether insurers encourage the use of proper repair procedures, and whether car insurance companies have rapid and satisfactory claims processes for customers.

Here’s a closer look at the expanded car insurance coverage options you can obtain through Connect:

Costco members can get accident forgiveness car insurance through Connect. Accident forgiveness waives your first at-fault accident, so your premium remains unchanged. However, you are only eligible for accident forgiveness once you have maintained a clean driving record and claim history for a certain amount of time.

New car replacement insurance is available as an endorsement from Costco. This feature applies if your car is totaled—you can replace it with the same make and model. The insurance company provides up to 110% of the MSRP of the new, replacement vehicle.

You can only use new car replacement coverage if the claim occurs within the first year of ownership of your vehicle or the first 15,000 miles, whichever comes first.

Gap insurance is available through Connect by American Family. This coverage only applies to drivers who lease or finance their vehicle. If your car is totaled, gap coverage will pay the difference between your car’s value right before the accident and the remaining balance on the car loan.

Gap insurance from Connect provides coverage that is 120% of your vehicle’s value. All gap insurance policies from Costco include new car replacement coverage for the first year of ownership and additional coverage for the next two years.

You can’t get a diminishing deductible through Costco car insurance. This benefit, which is offered by some insurance companies, lowers your collision or comprehensive insurance deductible when you maintain a clean claims history. Some insurance companies will lower your deductible to $0 if you go a certain amount of time without a claim.

Connect does not usually offer SR-22 insurance. However, Connect is required in some states to provide an SR-22 for a driver who meets eligibility requirements for an auto insurance policy.

An SR-22 is a court-ordered form that verifies you carry the required amount of car insurance in your state. It’s generally only required for high-risk drivers, such as drivers who have had their license suspended or have serious violations on their records, like a DUI.

Costco Insurance doesn’t offer usage-based insurance. However, many other insurance companies offer usage-based policies, which reward very safe drivers with a lower premium.

Usage-based insurance programs track your driving habits during trips, for instance your braking force and speed. Based on your driving behaviors, you can qualify for a discount on your premium.

Connect does not offer pay-per-mile insurance to Costco members. Pay-per-mile insurance can be beneficial for drivers who log very few miles and want to save money on car insurance.

With a pay-per-mile car insurance policy, the insurance company provides a mobile app or a device to install in your vehicle. The device or app tracks your mileage, and you get charged for insurance based on the distance you drive during the payment period.

If you drive for a rideshare service, like Uber or Lyft, you won’t be able to purchase rideshare insurance from Costco. Although Connect does not sell rideshare insurance policies, many other car insurance companies do.

Connect by American Family offers a large selection of auto insurance discounts for Costco members and non-members. Here are some of the ways you can potentially save:

• Costco member: Costco members get a discount on their car insurance policies. When you purchase insurance through Costco, you’ll be asked to provide your Costco membership number and the discount is automatically applied.
• Defensive driver course: If you complete a DMV-approved defensive driver course, you may be able to get a discount on your Costco car insurance policy. This course must be continuing education—basic driver’s ed classes for new drivers do not count toward this discount.
• Garaging: In some areas, you can qualify for a discount if you keep your car in a garage overnight.
• Good driver: If you have a clean driving record and avoid claims, you might qualify for the good driver discount, which Connect only offers to drivers in California.
• Good student: If you insure a full-time student on your car insurance policy, and they get good grades in school or maintain a minimum GPA, you might be able to save money on Costco car insurance with a student car insurance discount.
• Multi-vehicle: Drivers who insure multiple vehicles on a Costco car insurance policy are eligible for a lower premium.
• Policy bundling: Connect will provide a discount if you bundle two or more insurance policies. You can receive a home and auto bundle discount or a bundling discount for buying auto/umbrella insurance or auto/home/umbrella insurance.
• Premier safety: The premier safety discount is similar to the good driver discount but is available in all states where Connect coverage is sold. This discount is reserved for drivers with no traffic violations, accidents or claims within the last four years.
• Safety features: If your vehicle is equipped with certain safety features, like automatic seat belts, an anti-theft device or anti-lock brakes, Connect will lower your insurance premium.
• Student away at school: If a young driver on your policy attends school at least 100 miles away from home and does not have a vehicle with them, you can qualify for a discount on your car insurance.
• Tenure: After you have been continuously insured by Connect for a certain amount of time, you are eligible for a lower car insurance premium.

Costco Executive Members receive the following additional services, but availability may depend on the state you live in:

• Lifetime renewability: If you do not have major moving violations, there is no major change in the condition of your vehicle and you pay your bill on time, you can get lifetime renewability for your auto insurance policy.
• Roadside assistance: If you get a flat tire, run out of gas or need your battery charged, this pays for up to $75 for services to help get you back on the road.

Connect sells several other types of insurance, but these policies are not exclusively available to Costco members. Some of the additional policies available include:

• ATV insurance
• Boat insurance
• Business insurance
• Condo insurance
• Home insurance
• Motorcycle insurance
• Renters insurance
• Umbrella insurance