Costco Car Insurance: How It Works & If It's Worth Using (According To Reviews)

If you love Costco's bulk discounts (or their unbeatable food court), you might be interested in knowing they also offer member-exclusive auto insurance. Thanks to American Family Insurance, Costco shoppers can get signed up for CONNECT: an insurance program that includes a variety of perks in line with the deals you've come to expect from the warehouse club. But is it actually worth it? The answer depends on what you value in a policy, where you live, and how much customer service matters to you.

To be clear: Costco doesn't actually sell car insurance directly. Rather, it partners with American Family Insurance to offer the CONNECT plan to its members. To qualify, you must be a current Costco member (either Gold Star or Executive). If that's you, you can request a quote through Costco's Auto & Home Insurance arm and provide them with all the standard information like your vehicle details, driving history, and current insurance provider.

CONNECT includes all the basic types of coverage, including comprehensive, collision, liability, and uninsured motorist coverage. It also comes with a few valuable extras, including free windshield repair, gap insurance, accident forgiveness, and travel expense coverage if you're in an accident more than 100 miles from home.

One of the biggest upsides of Costco car insurance is its affordability. According to Business Insider, the average cost is around $1,368 per year, or $114 per month — about 16% cheaper than the national average for full coverage insurance. Additionally, Costco claims that members save an average of $595.86 in their first year after switching.

However, there are some downsides to consider. While Costco CONNECT boasts strong financial ratings (AM Best gives it an "A" for financial strength), its customer service reviews are mixed at best. Reviewers at the Better Business Bureau rate it just 1.21 out of 5 stars, and Wallethub gives it a 1.4 out of 5. The most common complaints include difficulty reaching representatives, slow claims handling, and inconsistent communication.

Also worth noting: Availability is limited. Costco CONNECT currently doesn't offer new policies in states like California, Florida, Alaska, Louisiana, Maine, North Dakota, or Wyoming. This makes CONNECT pretty inconvenient for that fraction of Costco shoppers situated in one of these blacklisted states. These folks might not be missing out, though: CONNECT might have scored above average in some JD Power regional satisfaction studies, it scored slightly below the national average in overall claims satisfaction.

For Costco members looking to save a little extra money (on top of what they're already saving on snacks, drinks, and gadgets at the warehouse), CONNECT can be a pretty solid choice. The lower premiums, automatic discounts, and exclusive perks make it more robust than some standard policies. Plus, the reviewers at Bankrate found that Costco's AM Best financial strength rating reveals a solid reputation of paying out claims on time.

Still, the value of Costco car insurance depends on what you prioritize. If you care about more than just getting the lowest possible premium, Costco's offering might not be ideal. The reviewers at The Zebra discovered that CONNECT gets more than the usual amount of complaints to the National Association of Insurance Commissioners (NAIC). These mixed reviews surrounding customer service and claims handling are enough to give even the biggest Costco fans pause. When all is said and done, you should always compare rates from multiple providers and make your decision from there.