Costco Auto Insurance Review: Ratings and Quotes (2024)

Costco provides members-only discounts on insurance policies from CONNECT by American Family Insurance. Here’s how to know whether it’s the right coverage for you.

Taylor Milam-Samuel
Taylor Milam-Samuel
  • 8+ years writing for major outlets, including MarketWatch and Business Insider

  • Master’s in Education

Taylor Mlam-Samuel is a personal finance writer and credentialed educator. When she’s not helping readers better save and spend money, she can be found teaching.

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Chris Schafer
Edited byChris Schafer
Chris Schafer
Chris SchaferSenior Editor
  • 15+ years in content creation

  • 7+ years in business and financial services content

Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.

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Updated June 5, 2023

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Multinational retailer Costco and CONNECT, a company powered by American Family Insurance, partner to provide member-only discounts on auto insurance. Even though you need a Costco membership to qualify for reduced pricing, Costco isn’t the insurance company.

Pricing is competitive — members save an average of nearly $600 the first year they switch. But add-on coverage options are limited, and customer complaints are shown to be higher than expected.[1]

Quick Facts
  • Costco-discounted policies are offered through CONNECT, a company under the American Family Insurance umbrella.

  • In addition to Costco membership discounts, CONNECT offers an impressive array of additional discounts that can further reduce your rate.

  • Coverage through CONNECT, with Costco membership discounts, is only available in some states.

What is Costco auto insurance?

Costco is known for its shopping warehouses and bulk offerings of products. But you can take advantage of additional perks with your Costco membership, including car insurance coverage.

Even though you don’t need to be a Costco member to access CONNECT insurance, it’s usually a smart idea since you’ll get reduced pricing. Customers are generally happy with the coverage, but it varies by region.

Based on the J.D. Power 2022 U.S. Auto Insurance Study, CONNECT ranks third for customer satisfaction in California, but it fails to rank among the leaders in other regions of the country.[2] Costco has also stopped selling new policies in California but is honoring existing policies.

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How does Costco auto insurance work?

Costco doesn’t provide insurance. The company partners with CONNECT, a company from American Family Insurance, to provide member-only discounts on car insurance. Costco earns money from referrals and functions as a sales partner.

Costco car insurance pros and cons

If you’re thinking about Costco car insurance, consider some of its advantages and drawbacks. 

  • Competitive pricing: On average, Costco members save more than $500 a year. You’ll also have access to a list of other discounts.

  • Extra perks: Costco Executive members get 24/7 roadside assistance and lifetime renewability at no additional cost.

  • High customer satisfaction: CONNECT, from American Family Insurance, ranks highly on J.D. Power’s customer satisfaction index in some areas.

  • Only available in some states: CONNECT insurance through Costco isn’t available everywhere and is only available in California to people with existing policies.

  • Higher-than-average customer complaints: Even though customers are satisfied in some regions, the National Association of Insurance Commissioners (NAIC) reports that customer complaints are four times higher than expected.[1]

  • Limited flexibility: Only a few add-on coverage options are available.

What is Costco’s KnowYourDrive app?

CONNECT customers can use the KnowYourDrive app. It’s a usage-based car insurance program that allows customers to earn a discount of up to 20% based on using safe driving practices.

The app tracks your driving and monitors distracted driving habits, like texting or picking up your phone when it’s unlocked. The safer you drive, the higher your discount. It’s an optional program, and participation won’t raise your premium.

Costco car insurance coverage

CONNECT insurance meets the standard state minimum required for coverage. In most states, drivers must have liability-only car insurance, which protects the other driver and their vehicle in the event of an accident.

Insurance through Costco is only available in some states. But if you can purchase a policy in your state, it fulfills the legal requirements required by your state, including bodily injury, property damage, uninsured motorist, and personal injury.

CONNECT recommends customers have comprehensive and collision coverage to ensure adequate coverage in the event of an accident.

CONNECT also offers optional coverage for an additional fee:

  • Car rental insurance: This provides reimbursement for a rental car if your car is damaged due to a covered event.

  • Gap insurance coverage: If you financed your car and owe more than the car is worth, gap insurance can help cover the difference if your vehicle is totaled.

  • Medical payments coverage: This coverage helps pay for necessary medical expenses due to an accident.

  • Roadside assistance: If you’re stuck due to car damage, roadside assistance will connect you with a tow truck.

If you’re a Costco executive member, you also get free 24/7 roadside assistance for up to $75 and lifetime renewability, which ensures you can renew your policy after an accident.

How to get a Costco car insurance quote

Costco makes it simple for members to get a car insurance quote from CONNECT.

Here’s how to get started:

  1. Call or complete the digital form. You can call 1-855-531-9253 and mention reference code 8A7, or you can use the digital intake form.

  2. Answer questions. Provide information about your coverage needs, drivers, and vehicles.

  3. Check your options. Decide whether you need add-on coverage or other extras.

  4. Review your quote. CONNECT will provide you with a quote to review. If you’re happy with it, you can finalize coverage.

Costco car insurance discounts

Most car insurance companies offer discounts that can reduce the cost of your policy. If you’re a Costco member, the most significant discount is usually the one your membership provides.

CONNECT also offers the following discounts:

  • Premier safety: You can get an additional discount if you maintain a clean driving record for a specific time.

  • Defensive driver: Complete an approved course about driving safety to be eligible.

  • Vehicle safety features: If your car has certain safety features, like a security system, you may be able to secure a lower rate.

  • Garaging: This discount is for people who park their cars in a garage overnight.

  • Good student: If there’s a student on your insurance policy, you can get a discount if they maintain good grades.

  • Student away: If your child is away at college and only uses the car during breaks at home, you might be able to insure them for a lower rate.

  • Multi car: If you insure more than one car with CONNECT, you can qualify for a lower rate.

  • Tenure: Once you’re with CONNECT for a certain length of time, you get an additional discount.

Costco insurance bundling options

One of the most straightforward ways to save money on your car insurance policy is to bundle multiple products from the same insurer. Insurance companies provide multi-product discounts to secure more business from existing customers.

As a Costco member, you can receive a multi-product discount on auto, umbrella, and home insurance policies. Home insurance is for protecting your house. Umbrella insurance provides higher coverage limits for your other insurance policies, including auto and home.

You have three options for bundles: auto and home; auto and umbrella; or auto, home, and umbrella. You’ll receive a larger discount if you bundle all three.

Costco insurance reviews and ratings

Customer experiences with CONNECT from American Family Insurance vary. While some customers are thrilled with the service and coverage, others find a better fit elsewhere.

Costco customer reviews

On sites like the Better Business Bureau and Trustpilot, customers appear generally satisfied with the price and customer service from CONNECT. Multiple Costco insurance reviews mention saving money, especially as Costco members.

But despite the positive reviews about pricing and friendly agents, some customers report that the claims process takes longer than expected. Reviewers on both websites share their frustrations about the company denying claims and dropping coverage after filing.

Costco ratings

As you shop for insurance, reviewing ratings from independent and third-party organizations is wise. The following scores focus on various aspects of Costco ratings, including customer satisfaction, number of complaints, and financial stability.

  • A.M. Best: A[3]

  • Better Business Bureau: A+[4]

  • S&P Global: A-[5]

  • Moody’s: A1[6]

  • NAIC Complaint Index: Higher than expected (4.74)[1]

Costco vs. other insurance companies

As a customer, you have lots of options for car insurance coverage. The car insurance market is highly saturated due to new companies competing with older ones. As you decide whether to proceed with Costco car insurance, consider reviewing the following companies.

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Costco vs. Allstate

As one of the largest insurance companies, Allstate offers reputable coverage, including extensive add-ons like rideshare insurance and a safe driving bonus. With Allstate, you can work directly with a local agent or establish coverage online. The coverage options are solid, and a range of discounts are available.

The primary difference between Allstate and CONNECT is that you don’t need a membership at Costco to access any of the discounts. Plus, Allstate is available in all 50 states, while CONNECT’s availability is more limited. If you’re interested in optional coverage like accident forgiveness or new-car replacement, Allstate might be a better fit. But you might find better rates with CONNECT.

Costco vs. GEICO

With solid customer reviews and a long history of car insurance coverage, GEICO is a popular choice for car insurance. You can work directly with a local agent, but you might struggle to find one, depending on where you live. Coverage is available in every state, and there’s an extensive list of discounts, which can make coverage more affordable.

GEICO doesn’t offer gap insurance coverage, while CONNECT does. If you financed a car that’s worth less than the amount you owe, gap insurance covers the difference if your vehicle is totaled. If you decide you want gap coverage, CONNECT is the better fit. But if you’re looking for the lowest rates, GEICO is probably a better choice.

Costco vs. Liberty Mutual

Liberty Mutual is more expensive than many of its competitors. Still, some customers feel that the extra benefits are worth the price. Liberty Mutual provides unique perks, like valet drop-off for rental car reimbursement and a deductible fund that decreases your deductible each year you don’t file a claim. The standard coverage options are robust, but the add-on options are limited.

If you’re looking for the most affordable coverage, a policy with CONNECT through Costco is likely a better pick. But if you’re a teacher, you might fare better with Liberty Mutual, due to exclusive teacher discounts and vandalism protection for no additional charge.

How to file an auto insurance claim with Costco

An insurance claim lets your insurance company know you’re requesting an assessment of damage or injuries and the funds to help fix it. It’s important to remember you’ll usually need to file a claim even if you’re not at fault.

To file a claim, you must:

  1. Log in or call. You can log in to your online account or call 1-800-872-5246 to begin the claims process.

  2. Provide information. The next step is to briefly summarize what happened and who was involved, including insurance details for the other driver.

  3. Connect with a claims adjuster. A claims adjuster from CONNECT will contact you for additional information and next steps. You might need to upload photos or access the police report, if applicable.

Costco insurance FAQs

If you’re shopping for a car insurance policy, here’s some additional information about Costco insurance that might help you in your search.

  • Is Costco-powered insurance legitimate?

    Yes. Costco partners with CONNECT from American Family Insurance to provide auto insurance. American Family has been in business since the 1950s and is a reputable insurance company with a solid financial outlook.

  • Is Costco car insurance worth it?

    The low price is one of the most significant factors that set Costco insurance apart from other insurers. It’s usually worth getting a quote to see how it compares to other options.

  • Who owns Costco insurance?

    American Family Insurance owns CONNECT, which is the insurance company that provides insurance products for Costco members.

  • Who should get Costco insurance?

    It’s worth checking out coverage from CONNECT if you’re looking for low-cost insurance options and already have a Costco membership.

  • Is Costco good at paying claims?

    All signs say yes. The A.M. Best ratings rank insurance companies’ financial outlooks, which indicate a company’s ability to pay claims. CONNECT has an A rating, which signifies a robust financial standing.


  1. National Association of Insurance Commissioners. "Results by Complaint Index."
  2. J.D. Power. "Auto Insurance Customer Satisfaction Stalls Despite $18 Billion in Premium Relief, J.D. Power Finds."
  3. A.M. Best. "Connect Insurance."
  4. Better Business Bureau. "CONNECT, powered by American Family Insurance."
  5. Standard & Poors. "Connect Insurance."
  6. Moody's. "Connect Insurance."
Taylor Milam-Samuel
Taylor Milam-Samuel

Taylor Milam-Samuel is a writer and credentialed educator who is fascinated by how people earn, save, and spend their money. When she's not researching financial terms and conditions, she can be found in the classroom teaching.

Chris Schafer
Edited byChris SchaferSenior Editor
Chris Schafer
Chris SchaferSenior Editor
  • 15+ years in content creation

  • 7+ years in business and financial services content

Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.

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