Costco Members: How to Get Affordable Car Insurance
Costco offers its members a long list of perks that keep people walking through the doors. One of those perks that many people don’t know about is auto insurance. Costco member auto insurance can save you money, whether you want full coverage or liability-only. The warehouse also offers additional perks like free roadside assistance and Costco rental car insurance.
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Written by
Sara Routhier
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Reviewed by
Cynthia Lanctot
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UPDATED: Jun 3, 2022
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- Costco members can buy auto insurance through American Family
- American Family receives a higher than average number of complaints, but it offers lower than average rates
- Costco insurance offers better prices for people with bad driving histories
- You can get car rental insurance through the Costco Citi card
- Gold Star members can earn a discount on their monthly rates, while Executive members get free perks
Since the first store rolled up its doors and opened for business in 1983, Costco has become a staple in American shopping. Costco is so popular that many Americans consider visiting the warehouse more of a recreational activity than an errand.
Costco membership comes with a long list of perks, but many members don’t realize they have access to auto insurance. However, the warehouse has been offering auto coverage for nearly 20 years.
Just like everything else you can buy, you can save money on your auto insurance with Costco. However, your exact quote will depend on your unique situation.
If you’re interested in affordable Costco member auto insurance, you should be ready to shop around for quotes. Enter your ZIP code into our free tool today to see what rates might look like for you.
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Costco Member Auto Insurance
While Costco sells auto insurance, the warehouse doesn’t actually provide the coverage. American Family Insurance, under the name CONNECT, works with Costco to write policies for its members.
If you’re a Costco member, you might be eligible for a discount. Additionally, American Family’s rates tend to be affordable compared to its competition, and you can take advantage of a few free perks.
However, there are drawbacks to Costco’s membership. For example, customers frequently complain about American Family’s customer service and support.
Is American Family good for car insurance?
American Family is one of the top 10 biggest insurers in the country, with an A.M. Best rating of A. As such, it has comparable rates and discounts to other top companies.
You can get all of the standard types of auto insurance from American Family, such as liability, comprehensive, and collision. Additional insurance options you can purchase include:
- Roadside assistance
- Personal injury protection (PIP)
- Medical expense
- Underinsured/uninsured motorist
- GAP insurance
- Accidental death and dismemberment
- Accident forgiveness
- Rental reimbursement
Another excellent reason to consider American Family is that the company offers a long list of discounts. These include:
- Multi-car
- Good driver
- Bundling
- KnowYourDrive app, which monitors your driving behavior
- Customer loyalty
- Safety equipment, like airbags or anti-lock brakes
- Teen safe drive program
- Good student
- Volunteer work for drivers under 25
- Low mileage (7,500 miles per year or less)
- Away at school
- Generational, for teens who have parents who are American Family customers
- “Steer Into Savings” for switching from another insurance company
- “Early-Bird” for changing to American Family at least seven days before your current policy ends
- Paperless, automatic payments, and paying in full
- For drivers over the age of 55, a defensive driving course
As you can see, American Family has a discount that works for just about everyone. Costco members can take advantage of all of these savings opportunities.
You can also purchase life and homeowners insurance with American Family, as well as motorcycle, renters, RV, ATV, and many other specific types of coverage. If you do, you’ll be eligible for the bundling discount.
How much does American Family insurance cost?
As far as rates go, American Family isn’t usually the cheapest option out there, but it does come in below the national average. Of course, Costco member auto insurance rates will depend on your circumstances, but you can get an idea by looking at typical prices.
First, you can consider average prices by age and gender:
| Companies | A.M. Best Rating | NAIC Complaint Index | J.D. Power Rating (Mid-Atlantic) |
|---|---|---|---|
| Allstate | A+ | 0.36 | 830 |
| American Family | A | 1.36 | N/A |
| Farmers | A | 1.25 | 794 |
| GEICO | A++ | 2.29 | 835 |
| Liberty Mutual | A | 3.85 | 833 |
| Nationwide | A | 1.7 | 823 |
| Progressive | A+ | 0.84 | 834 |
| State Farm | A++ | 1.14 | 851 |
| Travelers | A++ | 0 | 836 |
| USAA | A++ | 1.86 | 896 |
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Some factors are obvious, but others that affect your rates might not be so easy to guess. One of those factors is your credit score.
| Company | Clean Record | With One Accident | With Accident Forgiveness (+5%) |
|---|---|---|---|
| Allstate | $3,819.90 | $4,987.68 | $4,010.15 |
| American Family | $2,693.61 | $3,722.75 | $2,828.29 |
| Farmers | $3,460.60 | $4,518.73 | $3,633.63 |
| GEICO | $2,145.96 | $3,192.77 | $2,253.26 |
| Liberty Mutual | $4,774.30 | $6,204.78 | $5,013.02 |
| Nationwide | $2,746.18 | $3,396.95 | $2,883.49 |
| Progressive | $3,393.09 | $4,777.04 | $3,562.74 |
| State Farm | $2,821.18 | $3,396.01 | $2,962.24 |
| Travelers | $3,447.69 | $4,289.74 | $3,620.07 |
| USAA | $1,933.68 | $2,516.24 | $2,030.36 |
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Insurance companies consider your credit score because it represents your ability to pay your monthly bills. The higher your credit score, the lower your perceived risk. American Family is less forgiving of low credit scores than other companies.
Finally, insurance companies heavily weigh your driving record.
| Insurance Company | Annual Rates |
|---|---|
| Geico | $2,478 |
| State Farm | $3,510 |
| The General | $4,356 |
| AllState | $5,158 |
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As you can see, even a speeding ticket can negatively affect the prices of your insurance. However, the good news is that American Family offers lower average rates for people with marks on their driving record.
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American Family Insurance for Costco Members
On top of the many discounts you may be eligible for, Costco members enjoy additional savings. While the warehouse doesn’t say exactly how much, all members get a discount on their insurance.
There are two tiers of Costco membership. Gold Star is the basic membership and costs $60 a year. All Gold Star members are eligible for discounts on American Family insurance.
The Costco Executive membership costs $120 a year and comes with a few extra benefits in terms of auto insurance. One of the best of those benefits is a lifetime guarantee of insurance.
As an Executive member of Costco, American Family won’t cancel your insurance no matter how many accidents you get in. Of course, your rates will still go up, but you won’t have to worry about losing your insurance.
American Family reserves the right to cancel your coverage if you have a severe infraction, such as a DUI.
Executive members also qualify to have roadside assistance added to their policy for free. You might also score a Costco gift card for $100 when you sign up for a new policy.
One thing to note is that not every American is eligible for Costco’s savings on insurance. Residents of Massachusetts need to be Executive members to buy insurance, and people in Tennessee can’t buy it at all.
Costco Rental Car Insurance
One of the most popular perks of Costco membership is the travel deals. Not only can Costco get you where you want to be, being a member will also help you with your car rental. Even better, you can sometimes find a Costco car rental discount code to save even more.
You could also be eligible for a Costco rental car upgrade. An upgrade costs a little more, but you get a better car.
Through the Costco Citi credit card, you can get your rental car insured. All you need to do is pay for your rental with your card and decline coverage from the rental agency.
The Costco Citi card will cover you for up to $50,000 in repairs, but there are some rules. First, Costco will only cover you for 31 days. Additionally, Costco only covers certain types of damage:
- Accidents
- Natural disasters
- Vandalism
- Theft
Costco will also cover any towing expenses. It does not cover damage that occurs in a peer-to-peer rental car or bodily injury.
Costco Member Auto Insurance Equals Real Savings
From liability to full coverage, Costco offers its members great savings on auto insurance. Through its brand name CONNECT, American Family can help Costco members get on the road for less.
When you get quotes for Costco member auto insurance, you should still shop around. Enter your ZIP code into our free tool today to compare quotes from auto insurance companies in your area.