What is Costco Connect insurance?

Editorial team Published on

Costco Connect insurance is a member-exclusive auto and home insurance program offered through a partnership with American Family Insurance (specifically under the brand Connect, powered by American Family Insurance).

Key Features and Offerings

  • Types of Coverage: Available policies include auto, home, condo, renters, and personal umbrella (liability) insurance.
  • Member Discounts: Active Costco members can receive exclusive discounted rates and multi-product bundling savings.
  • Executive Member Perks: Costco Executive Members receive added benefits on qualifying policies, such as:
    • Lifetime renewability (preventing unexpected cancellation after multiple claims in most cases).
    • Roadside assistance and towing limits.
    • Glass repair waivers or reimbursements and home lockout assistance.
  • Underwriting: Auto policies are underwritten by subsidiaries like American Family Connect Property and Casualty Insurance Company, while property policies are generally handled through Homesite.
  • Availability: The program is available in most U.S. states, though availability, pricing, and specific perks vary by location (note that Costco Insurance Agency is not licensed in New York).

You can learn more or request a quote through the official American Family Insurance Costco Portal or via Costco's Auto & Home Insurance Services page.

Is Costco Connect insurance worth it?

Costco Connect insurance (powered by American Family) is generally worth it for Costco Executive Members who qualify for clean-driver discounts, but it receives mixed reviews regarding post-introductory rate hikes.

The Pros: Why It Is Worth It

  • Lower Average Rates: Full-coverage auto insurance rates average around 10% below the national average.
  • Executive Member Perks: Higher-tier Executive Members often get free roadside assistance and a valuable lifetime renewability benefit (meaning your policy cannot be unexpectedly canceled after multiple claims).
  • Strong Financial Backing: Underwritten by American Family, which holds solid financial strength ratings.

The Cons: The Drawbacks

  • Rate Increases: Opinions on platforms like Reddit are mixed: many users report steep premium spikes after the initial policy term ends, which is common in the industry but frustrating.
  • Higher Complaint Volume: Data tracked by the National Association of Insurance Commissioners shows that policies through this partnership sometimes log a higher-than-average volume of customer complaints relative to their size.
  • Limited Customization: There is no usage-based tracking app, and policy add-ons are basic compared to massive national competitors.

Is Costco Connect cheaper than Progressive?

Yes, on average, Costco car insurance (provided through CONNECT by American Family Insurance) tends to be cheaper than Progressive, though rates vary based on your personal driving profile and location.

Cost Comparison

  • Average Rates: Industry data shows that national average annual premiums for CONNECT through Costco hover around $1,068, whereas Progressive averages closer to $1,482.
  • Member Perks: Costco members get exclusive pricing, and Executive members get extra benefits like roadside assistance and a lifetime renewability option (meaning your policy can't be canceled just for filing claims).
  • Individual Factors: Your actual price depends heavily on your ZIP code, vehicle, and driving record. Some drivers actually find Progressive cheaper or report steep rate hikes with CONNECT upon renewal.

You can check out rates yourself or learn more about the partnership on the Costco Auto and Home Insurance Services page.

What insurance company is Costco Connect?

Costco Connect is an auto and home insurance program provided by CONNECT, powered by American Family Insurance.

Key Details

  • Underwriter: Policies are underwritten by American Family Connect Property and Casualty Insurance Company, American Family Connect Insurance Company, or related partner companies like Homesite.
  • Ownership: Costco does not own or underwrite the insurance. It is a brand partnership through the Costco Insurance Agency.
  • History: CONNECT was previously known as Ameriprise Auto & Home Insurance before American Family Insurance acquired it.
  • Member Perks: Costco members receive exclusive rates, and Executive members may get extra benefits like roadside assistance and lifetime renewability on eligible policies.

Is Costco Connect legit?

Yes, Costco Connect (officially called CONNECT, powered by American Family Insurance) is a legitimate insurance program offered to Costco members.

How It Works

  • The Underwriter: Costco does not sell or underwrite the insurance directly. Instead, they partner with CONNECT by American Family Insurance (formerly known as Ameriprise Auto & Home) to provide auto, home, and renters insurance.
  • Member Perks: Costco members often receive lower rates, and Executive Members may qualify for extra benefits like roadside assistance and lifetime renewability (meaning your policy cannot be canceled unexpectedly after multiple claims).
  • Availability: The insurance is available in most U.S. states, though coverage terms and exact discounts vary by location.

Costco (CONNECT) Car Insurance: Is It Worth It?

9 related questions found

What are the disadvantages of Costco car insurance?

The main disadvantage of Costco car insurance (provided by CONNECT by American Family Insurance) is its limited availability, as it is not sold in every state and is entirely unavailable for new policies in California and Florida.

Key Disadvantages

  • Restricted Availability: You cannot buy a new policy if you live in California or Florida, and coverage is missing in a few other states like Alaska, Maine, North Dakota, Rhode Island, West Virginia, and Wyoming.
  • Missing Add-On Features: CONNECT does not offer popular policy extras like rideshare insurance, vanishing deductibles, or accident forgiveness.
  • Higher Rates for High-Risk Drivers: While clean records get great rates, minimum-coverage options for high-risk drivers can average significantly higher than national benchmarks.
  • Outdated Digital Tools: Some users note that the customer portal and mobile app lack advanced self-service features, meaning you often have to call customer service to make policy changes.
  • Renewal Rate Increases: Some customers report steep price jumps upon renewal after the initial discount period ends.

How much is Costco Connect insurance?

The average cost of Costco CONNECT Insurance (underwritten by American Family Insurance) varies based on the type of coverage you need, though members frequently report significant initial savings.

Average Costco Auto Insurance Costs

Costco CONNECT auto insurance is generally cheaper than the national average for full coverage, but it can be more expensive if you are seeking minimum legal coverage.

  • Full Coverage: Averages $124 to $183 per month ($1,520 to $1,660 annually). This is roughly 10% to 37% cheaper than the national average.
  • Minimum Coverage: Averages $79 to $85 per month ($1,020 annually). This runs 30% to 60% above the national average.

Average Costco Home Insurance Costs

  • Starting Rate: Policies begin around $58 per month (roughly $700 annually) for baseline coverage levels (e.g., $200k in dwelling coverage).
  • Savings: Members who switch their homeowners insurance frequently report saving between $500 and $1,200 per year compared to major traditional carriers, especially when bundling.

Factors That Affect Your Actual Price

  1. Driving and Claim History: CONNECT tailors its best rates to "preferred risk" drivers who have no recent accidents, claims, or traffic violations. High-risk drivers see prices jump significantly.
  2. Costco Membership Level: To get these rates, you must factor in the annual membership fee ($65 for Gold Star or $130 for Executive). However, Executive Members receive additional free perks built into the cost, such as lifetime policy renewability, roadside assistance, and home lockout assistance.
  3. Location Availability: CONNECT does not write new policies in several states, including California and Florida.
  4. Bundling: You can save an additional 5% to 15% by bundling your auto policy with home, renters, or umbrella insurance.

You can check your personalized premium directly on the Costco CONNECT Insurance Page or by calling their quote line at 1-855-531-9253.

Who has the best but cheapest auto insurance?

USAA offers the best and cheapest auto insurance overall, but you must be in the military or have family who served to qualify. For drivers without military connections, Travelers and State Farm provide the best combination of low prices and high customer satisfaction among national companies.

Top Choices for Auto Insurance

  • USAA: Best overall for military families with the lowest average rates nationwide.
  • Travelers: Best national choice for full-coverage policies with low average monthly costs.
  • State Farm: Best large insurer for minimum liability coverage and strong customer satisfaction.
  • Country Financial: Excellent regional choice offering very low rates if you live in its specific service states.

Tips to Save Money

  • Shop around: Rates change by state, city, and driving record.
  • Bundle policies: Buy your home and car insurance from the same company to get a discount.
  • Keep a clean record: Safe driving keeps your monthly bills low.

Is Costco insurance better than AAA?

Comparing AAA and Costco insurance depends on whether you value robust roadside perks and localized service or potential savings through partner-underwritten bundles.

Direct Answer

Costco insurance (provided via CONNECT by American Family Insurance) often offers lower average annual premiums, while AAA provides much stronger, built-in roadside assistance and localized club benefits.

Core Differences

  • Underwriting & Availability:
    • Costco: Policies are underwritten by American Family Insurance (CONNECT) for auto and Homesite for home insurance. It is available in most states, though excluded or restricted in a few (and unavailable in Michigan).
    • AAA: Insurance is provided through regional AAA motor clubs via partner carriers (like CSAA or Safeco/Liberty Mutual depending on your region). Availability and rules change significantly by regional club.
  • Pricing & Savings:
    • Costco: Frequently reported by members to offer cheaper bundled auto and home rates, with average premiums often sitting below standard industry benchmarks.
    • AAA: Rates vary heavily by region; some drivers find competitive discounts, but rate hikes and non-renewals in high-risk weather states (like Florida) are common.
  • Perks & Membership Benefits:
    • Costco: Executive Members may qualify for perks like lifetime renewability (in eligible states) and free roadside assistance add-ons, but it lacks a dedicated standalone mobile app (relying on American Family's app instead).
    • AAA: World-class roadside assistance is core to the membership, covering towing, battery replacement, and flat tires directly, alongside extensive travel and hotel discounts.

User Sentiments and Forum Consensus

Opinions on Reddit are mixed; some users report saving hundreds switching to Costco, while others note rising renewal rates or claim delays with both providers over time.

Who is Progressives' biggest competitor?

State Farm is Progressive's biggest competitor, closely rivaling it for the top spot in the U.S. auto insurance market share.

📊 Major Competitors Breakdown

  • State Farm
    • Market share: ~18.6% to 18.9% (Largest overall U.S. auto insurer)
    • Strengths: Massive agent network, high claims satisfaction
  • GEICO
    • Market share: ~11.6% (Third largest)
    • Strengths: Low rates for clean-record drivers, aggressive digital marketing
  • Allstate
    • Market share: ~10.2% (Fourth largest)
    • Strengths: Comprehensive bundle options and specialized add-ons