Costco Car Insurance Reviews: Pros, Cons, and Costs

Costco Car Insurance Reviews

An infographic Illustration of Costco Car Insurance Reviews
An infographic Illustration of Costco Car Insurance Reviews

Costco is a well-known retail giant that offers a variety of products and services to its members, including car insurance.

It is provided by Connect, a subsidiary of American Family Insurance, and offers exclusive discounts and benefits to Costco members.

But how good is Costco car insurance? What are the pros and cons of buying car insurance from Costco? How much does it cost and how does it compare to other insurers?

This article will review all these about Costco car insurance.

What are the Coverage Options and Features of Costco Car Insurance?

Costco car insurance offers standard coverage options, such as:

  • liability,
  • collision
  • comprehensive
  • medical payments
  • personal injury protection
  • uninsured/underinsured motorist
  • roadside assistance

It also offers some optional features, such as:

  1. Accident forgiveness: This feature prevents your premium from increasing after your first at-fault accident, as long as you have a clean driving record for at least five years.
  2. New car replacement: This feature pays for the full cost of a new car of the same make and model if your car is totalled within the first year or 15,000 miles of ownership, whichever comes first.
  3. Gap insurance: This feature pays for the difference between the actual cash value of your car and the amount you owe on your loan or lease if your car is totalled or stolen.
  4. Rental car reimbursement: This feature pays for the cost of renting a car while your car is being repaired after a covered claim, up to a specified limit and duration.

However, Costco car insurance does not offer some coverage options that are available from other insurers, such as:

  • Usage-based insurance: This is a type of insurance that tracks your driving habits and adjusts your premium based on how you drive, such as your mileage, speed, braking, and time of day.
  • Pay-per-mile insurance: This is a type of insurance that charges you a base rate plus a per-mile rate based on how much you drive, which can save you money if you drive less than the average driver.
  • Rideshare insurance: This is a type of insurance that covers you when you use your car for ridesharing services, such as Uber or Lyft, which are not covered by your personal or commercial insurance.

Customer Satisfaction and Complaints

Costco car insurance has mixed reviews from customers, according to various sources.

On the positive side, Costco car insurance has a high rating from the Better Business Bureau, which indicates that it responds well to customer inquiries and complaints.

Costco car insurance also has a high rating from Consumer Reports, which measures customer satisfaction based on claims handling, service, and value.

Costco car insurance also has some positive reviews from customers who praise its low rates, discounts, and customer service.

On the negative side, Costco car insurance has a high complaint ratio from the National Association of Insurance Commissioners, which indicates that it receives more complaints than the average insurer of its size.

Costco car insurance also has some negative reviews from customers who complain about its claim delays, denials, and settlements, as well as its lack of communication and transparency.

What are Costco Car Insurance Pricing and Discounts?

Costco car insurance is known for its competitive pricing and discounts, especially for Costco members.

It offers a 5% discount for Costco Executive members and a 3% discount for Costco Gold Star and Business members.

Costco car insurance also offers various other discounts, such as:

  • Multi-policy discount: This discount applies if you bundle your car insurance with other types of insurance from Connect, such as home, renters, or umbrella insurance.
  • Multi-car discount: This discount applies if you insure more than one car with Connect.
    Safe driver discount: This discount applies if you have a clean driving record for at least three years.
  • Defensive driver discount: This discount applies if you complete a defensive driving course approved by Connect.
  • Good student discount: This discount applies if you are a student under 25 years old who maintains a B average or higher.
  • Loyalty discount: This discount applies if you renew your policy with Connect.
    Anti-theft device discount: This discount applies if you install an anti-theft device in your car, such as an alarm or a tracking system.
  • Safety feature discount: This discount applies if your car has safety features, such as airbags, anti-lock brakes, or daytime running lights.

The exact amount and availability of these discounts may vary by state and by policy.

The average annual premium for Costco car insurance in the US was $1,211 in 2020, according to ValuePenguin, which is lower than the national average of $1,674.

However, the cost of Costco car insurance may also vary depending on your age, gender, location, driving history, credit score, vehicle type, and coverage level.

Therefore, it is advisable to compare quotes from different insurers before buying Costco car insurance.

What is Costco Car Insurance’s Availability and Accessibility?

Costco car insurance is available in 45 states and Washington, D.C.

It is not available in Alaska, Louisiana, Maine, North Dakota, and Wyoming.

Costco car insurance is also not currently offering new policies in California and Florida, but existing customers in those states are not affected.

To buy Costco car insurance, you need to be a Costco member, which costs $60 or $120 per year, depending on the membership level.

You can apply for Costco car insurance online, by phone, or through a local agent.

You can also manage your policy, pay your bills, and file claims online, by phone, or through a mobile app.

Conclusion

Costco car insurance is a good option for Costco members who are looking for low rates, discounts, and standard coverage options.

Costco car insurance is provided by Connect, a subsidiary of American Family Insurance, and offers exclusive benefits to Costco members.

However, Costco car insurance also has some drawbacks, such as a high complaint ratio, a lack of coverage options, and limited availability.

Therefore, you should weigh the pros and cons of Costco car insurance and compare it with other insurers before making a decision.

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