Costco car insurance: How does it work?

If you're a member, you could get affordable car insurance with Costco, including perks like free roadside assistance.

Andrew Hurst


Andrew Hurst

Andrew Hurst

Senior Editor & Licensed Auto Insurance Expert

Andrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.

Updated|5 min read

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While it doesn't sell its own insurance, the wholesale retailer Costco offers its members discounted car insurance coverage through its partnership with American Family's CONNECT brand. With CONNECT, Costco members can get auto insurance that comes with free roadside assistance and glass coverage, as well as the chance to lower their costs even more with American Family's regularly offered discounts.

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CONNECT insurance has mixed customer service reviews, but the discounts and coverage options that are included with a policy make getting insurance through Costco worth considering, especially if you're already a Costco member.

Key takeaways

  • Costco offers its members a discount on car insurance from American Family's CONNECT brand

  • Compared to other large providers, car insurance rates from American Family are affordable even before Costco's discounted rates — which Costco claims saves most people $582 per year.

  • When you sign up for car insurance coverage through Costco, you could get roadside assistance and glass damage deductible waiver for no additional cost, plus a range of other coverage options.

What is Costco car insurance?

Costco doesn't really have its own car insurance. Instead, the retailer links members access to coverage provided by American Family's CONNECT brand, formerly Ameriprise. Like Costco's deals for homeowners insurance through CONNECT and life insurance through Protective, Costco car insurance refers to the discounted policies available to Costco members.

When you sign up for car insurance with American Family's CONNECT through Costo, you receive a discount the retailer claims saves members an average of $582 per year on insurance. Additionally, the insurer offers other discounts you may be able to use to lower your rates even more, including savings opportunities for safe and defensive driving.

Since American Family partners with Costco to offer the company's CONNECT brand at a discount, the insurer is the one that handles any claims you make. CONNECT receives more complaints from customers than expected for the insurance market, but if you're looking for cheap coverage with some room for customization, Costco auto insurance is still worth considering.

→ Read our detailed review of American Family's car insurance

Costco auto insurance quotes

Generally, Costco's insurance partner American Family, which backs CONNECT insurance, is relatively affordable compared to its competitors. Depending on the membership discount Costco customers receive when signing up for car insurance, your cost of coverage may be even cheaper. 

American Family, the parent company of CONNECT, costs an average of $1,515 per year for full coverage. However, your rates after getting coverage through Costco may vary depending on the availability of the CONNECT brand in your area, along with other factors such as driving record and coverage levels.

Comparison of Costco insurance (AmFam)

Costco car insurance may also be a good option for drivers who have been in an accident before. While American Family's rates remain third in our comparison with other large insurance companies, drivers who have been in an accident see the second-lowest percent increase after a claim — a rise of 41% — and these rates may carry over to its CONNECT brand too.

InsurerCostCost with accidentDifference
State Farm$1,240$1,44517%
American Family$1,515$2,13141%

Although neither American Family nor Costco list the exact membership discount that you get when you buy auto coverage through Costco, a comparison of public rate filings reveals that you could save around 10% on your premium with Costco car insurance, depending on where you live. This means that the average cost of CONNECT insurance with Costco is potentially even more affordable compared to other large car insurance providers.

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How to get a quote from Costco

When you request an auto insurance quote from Costco, you'll be directed from the retailer's website to American Family's CONNECT website where you can apply for coverage. Since Costco works with American Family's CONNECT brand to give its members access to discounted insurance coverage, a membership discount will be applied to your premium after you complete the insurer's quote form.

It's easy to get car insurance quotes from CONNECT as a Costco member. Before you get your own rate, you'll need personal information, including:

  • Your address

  • Your previous insurance history

  • The vehicle identification number (VIN) of the car

  • How the vehicle will be used

  • Any past accidents or violations you have

  • All of the car's drivers

Once you input all of the information required by CONNECT, you'll be able to finalize your coverage with a payment. However, depending on your personal information, you may not be able to purchase coverage. People without prior insurance or with many previous violations may have their applications denied.

→ Read more about how to get car insurance quotes

Costco car insurance discounts

In addition to the membership discount that you get when they sign up, there are a range of other discounts that you can get with Costco car insurance. It's relatively easy to qualify for many of the discounts that you could get with Costco auto insurance. 

Costco insurance could be a good option for budget-conscious shoppers looking for cheap rates thanks to the high number of discounts available with CONNECT by American Family, along with the company's affordable insurance premiums.

The insurer offers a range of discounts, including:

  • Safe driver discount: Maintain an accident-free driving record for four years.

  • Defensive driver discount: Complete an accredited defensive driving course with your state's DMV or other organization.

  • Vehicle safety features discounts: Equip your vehicle with safety features, like anti-lock brakes, anti-theft brakes, automatic seatbelts, smart-driving features, and more.

  • Garaging discount: Keep your vehicle in a secured garage overnight. 

  • Good student discount: Earn consistently high grades as a full-time student.

  • Student away discount: Live at least 100 miles away from home while at college and get lower rates for infrequent driving.

  • Multi-car discount: Insure more than one vehicle or purchase more than one type of insurance.

  • Tenure discount: Stay a policyholder for consecutive years and avoid higher rates that may be offered to new customers.

Costco insurance coverage options

Drivers who get car insurance from Costco receive a few types of special coverage for no additional fee. You could supplement your policy's standard protections with free roadside assistance. Additionally, Costco car insurance includes a glass damage waiver, allowing you to make glass damage claims without paying a deductible.

Costco insurance also comes with a guaranteed renewal agreement. This perk allows you to renew your insurance policy regardless of how many accidents, violations, and other incidents you're involved in. 

Drivers can also add several endorsements to their existing policies. However, these add-ons are not included with a basic policy when you sign up for Costco car insurance. Instead, you can purchase the following types of coverage for a fee:

  • Rental car insurance: Pays for a temporary rental car following an accident while your normal vehicle is damaged and undrivable.

  • Gap insurance: If you're leasing your vehicle or paying off an auto loan and your car is totaled, gap insurance covers the difference between the value of your car and the remainder of your loan or lease.

  • Full replacement cost: Unlike actual cash value replacement, full replacement cost coverage replaces your damaged vehicle without consideration for its depreciation. With Costco insurance from CONNECT, you could replace your vehicle up to 110% of the suggested retail price within the first year of ownership.

Costco car insurance customer service

If you purchase Costco car insurance, your claims will be handled by American Family and CONNECT instead of Costco, your policy's underwriting company. According to the National Association of Insurance Commissioners, American Family receives more complaints than expected for its service.

However, J.D. Power has rated American Family Insurance highly in its claims satisfaction study. It is one of eight insurers that placed above the industry average for satisfaction. Finally, American Family's credit has been rated as "Excellent" by A.M. Best, an industry evaluator. This means that if you get Costco car insurance you likely won't have to worry about the financial stability of the company.

→ Read about how Costco car insurance stacks up against other insurance companies

Frequently Asked Questions

Do you have to pay for Costco car insurance every month?

If you get CONNECT insurance through Costco, the insurer provides you with a few payment options. Besides paying monthly, you could pay your entire premium at once and get a discount. Alternatively, if you have a six-month policy, you could qualify for one payment-free month. Under this plan, you'd make five equal payments instead of six. Your rate would be the same, but this arragement could help you prioritize other bills during the month you don't owe CONNECT a payment.

Does Costco sell other types of insurance?

In addition to car insurance, Costco also has a partnership with CONNECT to get members discounted homeowners insurance. Members can also get membership discounts for life insurance, pet insurance, dental insurance, and group health insurance — along with a range of other services.

Is Costco insurance cheaper?

Costco insurance could be a good way to get cheap coverage depending on the type of insurance you want and the average cost of coverage near you. Since members receive a discount for signing up with partnering insurance providers through Costco, areas where the insurers are already among the cheapest options available could see even lower premiums when a discount is applied.


Policygenius has analyzed car insurance rates provided by Quadrant Information Services for every ZIP code in all 50 states plus Washington, D.C. For full coverage policies, the following coverage limits were used:

  • Bodily injury liability: 50/100

  • Property damage liability: $50,000

  • Uninsured/underinsured motorist: 50/100

  • Comprehensive: $500 deductible

  • Collision: $500 deductible

In some cases, additional coverages were added where required by state or insurer.

Rates for overall average rate, rates by ZIP code, and cheapest companies determined using averages for single drivers ages 30, 35, and 45. Our sample vehicle was a 2017 Toyota Camry LE driven 10,000 miles/year.

Rates for driving violations and “Poor” credit determined using average rates for a single male 30-year-old driver with a credit score under 578.

Some carriers may be represented by affiliates or subsidiaries. Rates provided are a sample of costs. Your actual quotes may differ.