With a reputation for low prices and an impressive array of products, Costco has developed quite the loyal following. Many shoppers at the members-only warehouse company wonder if Costco car insurance lives up to the brand’s hype.
In this review, we’ll closely inspect Costco car insurance to find out whether it can compete with the country’s best car insurance and cheapest car insurance companies.
Costco Auto Insurance Reviews
We rate Costco Auto Insurance a 4.3 out of 5.0. Our scoring is aggregated from Costco’s performance across four main areas — cost, coverage, reliability, and customer service. Our review team calculated these scores using our robust methodology, which was created from our unbiased assessments of car insurance companies.
Is Costco Car Insurance Good?
Costco car insurance stands out because of its affordable plans and wide selection of coverage options. There’s a lot to like about Costco auto insurance, from cheap rates to an impressive set of coverage. Costco’s auto insurance provider American Family Insurance is also highly rated in industry studies for its size.
Pros And Cons of Costco Insurance
Here are the pros and cons of Costco auto insurance:
Costco Car Insurance Ratings
Better Business Bureau (BBB) rating: A
BBB complaints in the past three years: 150
J.D. Power customer satisfaction index: 889 out of 1,000
Trustpilot rating: 2.3 out of 5.0 stars
Costco car insurance reviews overall speak about their affordable prices and good claims customer service. Since American Family Insurance underwrites every Costco car insurance policy, most of these reviews are written about American Family’s services.
Costco Car Insurance: J.D. Power Ratings
American Family ranks averagely in the J.D. Power 2022 U.S. Insurance Shopping Study℠ for midsize insurers. American Family Insurance also ranks above average in several regions in the J.D. Power 2022 Auto Insurance Study, including the California, Central, Northwest, and Southwest regions.
Costco Auto Insurance Mobile App
There is no Costco car insurance app, but customers can take advantage of the American Family mobile app–which is highly rated on both Google Play and the App Store. You can use this app to get car insurance quotes, purchase plans, pay auto insurance bills, and even send in car insurance claims.
Costco Car Insurance Overview
Parent insurance company: American Family Insurance
States available: 44 plus Washington, D.C. (unavailable in Alaska, Louisiana, Maine, North Dakota, Rhode Island, and Wyoming)
AM Best financial strength rating: A
Insurance types: Auto, home, renters, umbrella, specialty
Costco car insurance is offered through their partner American Family Insurance to offer affordable coverage. According to the National Association of Insurance Commissioners (NAIC), American Family was the seventh largest U.S. insurance provider in 2021, capturing 4.18% of the market share. Its agreement with American Family Insurance means that customers will likely work with the AmFam customer service team in the event of a claim.
Overall, Costco car insurance may be worth a look for Costco members who are on the hunt for the cheapest car insurance possible. However, Costco’s main focus is on selling goods and it stands as the sixth-largest retailer in the world, making over $163 billion in revenue in 2019 alone. Costco car insurance is less expensive than average.
Costco Car Insurance Coverage
Those who pick Costco car insurance can expect to choose from various coverage options, as the company offers the six standard types of insurance as well as some optional perks. Liability coverage comes included with every plan, as required by law. It’s recommended to get more than the minimum car insurance standard so that you’ll be prepared when problems arise.
Costco Car Insurance: Additional Coverage
When purchasing a Costco car insurance plan, customers can choose from the following additional benefits:
- Roadside assistance: Roadside assistance ensures that your car will get fixed if it breaks down mid-trip.
- Towing coverage: Towing coverage takes care of the costs of having your car towed after a breakdown.
- Rental car reimbursement: Rental car reimbursement covers your transportation needs, up to a certain amount, while your car is in the shop for repairs.
- Guaranteed asset protection: GAP insurance pays the difference between your loans and your car’s depreciated value if it gets totaled.
- Glass repair deductible waiver: This eliminates your deductible if your windshield can be repaired rather than replaced after being dented.
- Stolen key coverage: This covers the costs to replace your car key after a theft if you have comprehensive insurance.
- Accident travel expense coverage: Accident coverage takes care of travel and accommodation expenses if you end up in an accident over 100 miles from home.
Costco Executive members receive lifetime renewability and free roadside assistance with every plan. Lifetime renewability is a standout feature, as it ensures that policyholders with Executive membership won’t be dropped due to most accidents or traffic violations.
Though not an insurance product, Costco also offers identity theft protection to members.
Costco Citi Card Car Rental Insurance
Costco offers rental car insurance coverage when you buy a rental with a Citi card and it’s all free. However, this insurance is only offered if you decline coverage from the rental agency. Coverage includes damage due to an accident, natural disaster, vandalism or theft of the vehicle, and towing expenses. If your rental is damaged or stolen you are covered for up to $50,000 in repair costs or the cash value of the car depending on which is cheaper overall.
While many things are covered under the Costco rental car insurance policy it does not cover bodily injury, peer-to-peer car sharing rentals, and any damages that violate a rental agreement. Its rental insurance also applies worldwide and is considered primary insurance outside of the United States.
Costco Car Insurance Cost
It’s no surprise that Costco is known for its affordable prices, including with car insurance. Our cost estimates for American Family, the insurance administrator, average around $128 per month or $1,537 per year for full coverage car insurance. This is just below the national average of $1,730.
Costco Car Insurance Quote
Regardless of the provider you choose, how much car insurance is depends on the individual.
Some key factors that could affect Costco car insurance quotes include:
- Location: States with demanding car insurance standards, higher crime rates, and higher numbers of uninsured motorists cause car insurance costs to increase. Urban residents also tend to have higher premiums than rural areas.
- Age and gender: Younger men pay steep prices for car insurance, though premiums go down as drivers age.
- Marital status: Married drivers are involved in less accidents than single drivers, so they pay lower prices on average.
- Credit score: The lower your credit score, typically the higher your auto insurance rate.
- Driving history: If you have a history of car accidents or DUIs, you’ll pay significantly higher car insurance premiums.
- Vehicle type: If you have a new car, a vehicle commonly targeted for theft, or one rated poorly for safety, expect to pay more on car insurance.
Costco Car Insurance Discounts
Excellent rates can be found through Costco car insurance, but discounts still come in handy. The company has plenty of additional savings opportunities.
Costco’s multi-product discount benefits those who bundle Costco car insurance plans with the retailer’s options for homeowners insurance, life insurance, or umbrella insurance. This is a great way to save if you’re ready to let Costco cover all of your insurance needs. Keep in mind that American Family Insurance will become your provider in all three cases.
Costco Insurance Reviews: Conclusion
Our reviews team gives Costco auto insurance 4.3 out of 5.0 stars for its cheap insurance rates overall and good customer service record. While Costco does not offer car insurance directly, it provides a healthy amount of options to choose from through the partner American Family Insurance.
Costco also offers rental car insurance through its Citi credit card which has a wide array of coverage but does not cover injuries in rentals. Though Costco auto insurance can be a great option, we urge you to look around and compare your options to get the best deal for you.
Costco Car Insurance Competitors: Top Picks
If Costco car insurance isn’t the right choice for you, we recommend comparing car insurance quotes from a few leading providers.
Progressive: Best Usage-Based Insurance
Not every driver has the best record, but they still need auto insurance. Luckily, Progressive offers cheap, high-quality plans to nearly every type of motorist. Affordable plans can be found using Progressive’s system of usage-based insurance. Instead of paying one flat monthly rate, customers are charged for how often they drive their vehicles. Motorists whose cars aren’t used much could reap significant savings with Progressive.
Read more: Progressive insurance review
Geico: Best for Discounts
In our review of the best car insurance companies on the market, Geico stood out because of how effortlessly it mixes affordable rates with exceptional service. Few auto insurance companies receive as much praise as Geico, a true testament to its customer-focused outlook. Other providers can sometimes beat Geico’s prices, but usually not by much. With high standards and countless satisfied customers, it’s obvious why Geico is the second-largest car insurance provider in the country.
Read more: Geico insurance review
Costco Auto Insurance Review: FAQ
How We Rate Insurers
Our review process aims to deliver consistent and unbiased assessments of car insurance providers. While there are multiple qualities that make a car insurance company successful, our review team focuses on those we believe are the most important for consumers:
- Cost: Cost can be difficult to compare between insurers because so many factors impact annual premiums. The cheapest insurer for one driver may not be the cheapest for another. To determine our cost score, we look at insurance rate estimates generated by Quadrant Information Services, discount opportunities, and consumer reports.
- Coverage: To determine our coverage score, we look at the number of coverage options available as well as coverage limits and deductible options. Our ratings also take into account additional services and benefits like roadside assistance.
- Reliability: It’s important that an auto insurer is able to meet its claims obligations. Companies with a strong financial strength rating from AM Best score best in this category. Established insurers with a long history of reliable service also receive positive marks.
- Service: We comb through customer reviews on sites like the Better Business Bureau (BBB) to learn about customer experiences. Insurers with a low volume of complaints score well in this area. We also consider the claims process, giving higher ratings to car insurance providers that offer easy-to-use claims apps.
*Data accurate at time of publication.