Costco homeowners insurance: How does it work?

Costco members can get discounts on Connect homeowners insurance when they purchase coverage through the wholesale store.

Kara McGinley

By

Kara McGinley

Kara McGinley

Property and Casualty Insurance Expert

Kara McGinley is an insurance editor at Policygenius, specializing in home, auto, and renters insurance. She's been writing about insurance since 2019, and her work and insights have been referenced in Kiplinger and WRAL.com.

Updated September 9, 2021|3 min read

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Costco members get a surplus of benefits outside of the brick and mortar warehouse store. In addition to household goods, Costco members can get discounts on everything from home insurance to cruise ship vacations to rental cars.

If you’re a Costco member, you are eligible to get homeowners insurance discounts through Connect Insurance, a subsidiary of American Family Insurance. Connect sells the homeowners insurance policies, not Costco. That said, whether or not you should buy homeowners insurance through Costco will depend on a variety of factors.

Key Takeaways

  • Costco does not sell its own homeowners insurance, but it does offer members a discount on insurance through Connect

  • Costco members who buy a policy through Connect receive additional coverage like identity theft protection and stolen credit card protection

  • Even with the discount, Connect might not be the best insurance option. Be sure to shop around and get quotes from multiple carriers

Does Costco sell homeowners insurance?

No, and Costco itself is not a homeowners insurance company. However, it does offer discounts to members on homeowners insurance through Connect, a separate partner. If you are a Costco member, you can go online to see the member services that Costco offers. There’s a list of various financial products from different companies that offer discounts for Costco members, including home and auto insurance.

If you’re interested in home insurance, Costco can direct you to the Connect website where you can apply for a policy. You will receive a homeowners insurance quote through Connect with a Costco membership discount applied to your premium. Costco essentially acts as the agent while Connect is the insurer.

In addition to discounted homeowners insurance premiums through Connect, Costco members also receive additional coverage that is not automatically included in a basic homeowners policy.

Below are some examples of the additional protection Costco members receive.

  • Identity theft protection

  • Stolen credit card use or check fraud protection

  • Food spoilage protection

  • Lock replacement expense protection

Connect offers even more benefits for Costco executive members by adding glass repair reimbursement and home lockout assistance to their homeowners insurance policies.

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Is Connect homeowners insurance any good?

Connect offers the same homeowners insurance coverages as every major insurance company, meaning it protects your home in the event it’s burglarized or damaged by risks like fire or bad weather. 

Connect’s parent company, American Family, earned a score of 79 out of a possible 100 from Consumer Reports, which aggregated information from 6,940 of its members whose rating was based on homeowners insurance claim satisfaction.

American Family’s claim score actually put them last among surveyed companies for claim satisfaction. However, customers rated agent courtesy, timely payment, and promptness of response as four out of five points, meaning they were very satisfied.

The best way to know if a homeowners insurance company is right for you is to shop around and read reviews.

Is Costco homeowners insurance worth it?

When calculating your quote, insurance companies will factor in what ZIP code you live in, how old your home is, your credit score, and more. The average annual homeowners insurance premium is around $1,250, but costs vary widely across the U.S.

Because there are so many factors that go into calculating a homeowners insurance premium, it’s difficult to predict how much a Connect homeowners insurance policy with a Costco membership discount applied might cost. 

Since homeowners insurance prices vary from state to state and house to house, it’s important that you shop around. There’s a chance that, even with your Costco membership discount, another insurance company could give you a lower rate. An independent agent can help you compare quotes from multiple homeowners insurance companies and choose the best policy for you.