How Costco Can Help You Save on Car Insurance

On its website, Costco emphasizes that, out of those who saved money when they switched to CONNECT, the average savings for Costco home and auto bundlers was $595.86 for the first year. The key words here are “out of those who saved.”

Most insurance providers use this phrasing to neglect customers who didn’t save money by switching auto insurance companies. Costco doesn’t reveal the average savings across all customers, so there’s no way to know for sure if you can save by switching to their policy unless you request a quote from them.

Our analysis found that Costco’s average rates for full coverage are cheaper than the national average by about 10 to 30 percent, though its minimum coverage rates are higher than the national average. Exactly how much you pay will depend on unique factors like your age, zip code, driving history, and more.

Costco Auto Insurance Discounts

That said, with CONNECT, you can potentially receive insurance discounts for the following.

• Costco membership: There’s a discount simply for being a Costco member. Make sure to give CONNECT your Costco membership number when you buy your policy to unlock savings. Note that this discount isn’t available to Gold Star members in Massachusetts — only Executive members.
• Good driver: In California only, you can get a discount for being a good driver.
• Premier Safety: Have no traffic violations, claims, or accidents on your record in the past four years? Get a discount for being such a safe driver.
• Defensive driving course: Whether you’re a newly minted teen driver or someone who simply needs a refresher, you can get a discount if you take a DMV-approved defensive driving course.
• Vehicle safety features: If your vehicle includes anti-theft devices, anti-lock brakes, airbags, or automatic seatbelts, you’ll see a reduction in your car insurance premiums.
• Garaging: In some areas, you can save money by parking your vehicle overnight in a garage.
• Good student discounts: Although Costco doesn’t list the exact GPA required, full-time students with good grades can get discounts on their premiums. This is a great deal for teen drivers with costly car insurance. With most companies, the threshold for a good student discount is a 3.0 GPA (B average).
• Student away from home: A student who leaves their car at home and attends school more than 100 miles away can receive a discount.
• Multicar: With each car you add to your CONNECT policy, you’ll pay less to insure each individual vehicle.
• Bundling: Whether it’s bundling your home and auto insurance, your auto and umbrella insurance, or your auto, home, and umbrella insurance, CONNECT offers discounted rates.
• Tenure: CONNECT rewards loyalty when you reach “time-related milestones,” although it doesn’t specify what those are.¹

CONNECT policies offer all of the typical coverages—liability, uninsured motorist, collision, comprehensive, medical payments, etc.— as well as the following optional coverages.

Roadside Assistance

Your membership will reimburse you for any roadside assistance you need for issues like towing, tire changes, jump starts, fuel delivery, lock outs, and getting stuck in the snow. Like most roadside assistance programs, it does not cover the cost of batteries or fluids such as oil, gas, and coolants.

Costco offers more than just car insurance for its members, both through CONNECT and through other providers. Other available policies include the following.

CONNECT

• ATV insurance
• Boat insurance
• Classic car insurance
• Flood damage insurance
• Motorcycle insurance
• Rental property insurance
• Renters insurance
• RV insurance
• Umbrella insurance

Other Providers

• Business health insurance (CBC)
• Term life insurance (Protective)
• Pet insurance (FIGO)

While we only have Costco and CONNECT’s data to rely on, which undeniably does not tell the whole story, customers tend to like CONNECT. Nearly 90 percent of its Costco customers renewed their policies, while 89 percent were satisfied with the service². It’s certainly a positive that most American Family CONNECT customers appreciated the customer service behind the products and services.

Looking beyond self-reported data, American Family, the company behind CONNECT, has great third-party ratings with J.D. Power and the Better Business Bureau (BBB). According to the J.D. Power 2024 U.S. Insurance Shopping Study, American Family, commonly known as AmFam, is the third-highest ranking midsize insurer, with a customer satisfaction rating of 702 out of 1,000 (the average is 676).³ American Family is not accredited with the BBB, but it has an A+ rating and provides customers with 71 years of experience.⁴

If you’re not already a Costco member, you should take the membership fees into account when  considering whether or not to use CONNECT as your auto insurer.

CONNECT offers standard coverages and a variety of discounts for drivers with a Costco membership. The amount you save by switching to CONNECT or bundling policies may vary. However, the provider does have higher-than-average third party ratings, along with the potential to waive the deductible for certain coverages. If you’re already a Costco member, it may be worth your while to get a quote.