Here’s Why You Should Get Auto Insurance From Costco (Hint: You Could Save $600)

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Costco members get exclusive deals on car insurance from CONNECT. Find out how much you could save. 

Costco members who are looking to save money on car insurance without sacrificing coverage will be pleased to know the warehouse retailer sells insurance. While Costco doesn’t package insurance policies itself, it can give members deals through CONNECT, which is backed by American Family Auto.

If you’re shopping for the best car insurance — or just looking for a deal — let’s take a look at what perks Costco car insurance has to offer.

Costco members get exclusive savings

When members apply through Costco for car insurance, CONNECT will automatically give them a “members-only” discount on their premium. This is in addition to any other car insurance discounts they may qualify for, like good driving or paperless billing.

As far as how much you could save, Costco says its members save on average $595.86 in the first year they switch to CONNECT. The insurance site The Zebra went even further than that. According to its study, Costco was cheaper than seven major insurance companies, including:

AllstateFarmersGeicoNationwideProgressiveState FarmUSAA

What’s even more astonishing is that the difference between the most expensive policy on this list (Farmers at $2,790) and Costco ($1,068) amounted to roughly $1,700.

Whether you save this much, however, will depend on your driving record, the car you’re insuring, where you live, and how much coverage you plan on buying. Even if Costco is the cheapest generally, it’s still worth comparing your Costco quote with other car insurance companies, just to see which is offering you the best rate.

Executive Costco members get additional benefits

Those with an Executive membership ($120 annually) will be offered additional car insurance perks. These include:

Lifetime renewability: Under this provision, Costco Executive members never have to worry about CONNECT dropping coverage after an accident, no matter how costly. As long as the driver doesn’t have major traffic violations, pays their premium on time, and doesn’t live in Maryland or Maine, they’re guaranteed continuous coverage.Roadside assistance: Executive members will be compensated up to $75 when they’re stranded on the road, whether from dead batteries, flat tires, or locked keys.

In addition to these perks, you could also get Stolen Key Expense coverage if you buy comprehensive coverage. This will replace any stolen keys and locks with a deductible waiver so long as it costs $250 or less.

Costco car insurance may be the cheapest, but it might not be the best overall

One potential downside to Costco car insurance is the customer service at American Family Auto.

While Costco itself claims that roughly 89% of its members were satisfied with its car insurance, American Family Auto’s National Complaint Index — which measures how many complaints an insurance company receives to its share of market premiums — is fairly high. Its NAIC is currently at 4.74, which means it receives more than 4 times the volume of complaints compared to the market. For perspective, Geico’s NAIC is 1.21 and Allstate’s is 0.

That might not be a dealbreaker. But it’s certainly important to keep in mind, especially as you shop for car insurance at different companies. At the end of the day, however, if price is most important to you, it’s worth getting a free quote to see how much Costco’s car insurance could save you.

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Ready to shop for car insurance? Whether you’re focused on price, claims handling, or customer service, we’ve researched insurers nationwide to provide our best-in-class picks for car insurance coverage. Read our free expert review today to get started.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool recommends Progressive. The Motley Fool has a disclosure policy.

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