Costco is a membership-based warehouse club that is well known for its low prices and high product quality. To shop at Costco, you can either purchase a regular membership that costs $60 per year, or an Executive membership that costs $120 per year. With the Executive membership, you also get the unique benefit of receiving an annual 2% reward on all your eligible Costco and Costco Travel purchases.
What is less well known about Costco is that besides physical products such as food, household goods, and consumer electronics, it also sells a wide variety of services such as mortgages, identity protection, and insurance.
Costco’s auto, home, dental, and travel insurance are cheaper than the market rate. Costco auto insurance is one of the best deals on the market, with an average price that is less than 50% of that of Allstate or Farmers auto insurance. A 6-month policy of auto insurance from Costco costs $534 on average, compared to $1,011 from Allstate and $1,395 from Farmers.
Let’s take a look at different types of insurance from Costco in more detail. We will compare them with similar products from major insurance companies. By the end of this article, you will be in a good position to make informed choices about which insurance products are best suited for your needs.
What Insurance Products Does Costco Offer
Costco offers a wide variety of insurance products – auto, home, medical, dental, life, and travel. While Costco may be the seller of these insurance products, it is important to keep in mind that Costco does not actually provide the insurance. Rather, Costco partners with various insurance companies or brokers to provide the insurance.
Costco Auto Insurance
Costco auto insurance is provided by American Family Insurance under the brand name CONNECT. American Family Insurance is a private mutual company that offers a whole host of financial products such as auto insurance, life insurance, property insurance, and retirement-planning products.
American Family Insurance is a Fortune 500 company with close to 100 years of history. It has revenue of more than $12 billion in 2019. In 2019, it acquired Ameriprise Auto & Home Insurance, the insurance company that provided Costco’s auto and home insurance previously.
Costco Home Insurance
Costco home insurance is also provided by American Family Insurance under the same brand name as Costco’s auto insurance – CONNECT. As mentioned above, American Family Insurance acquired Costco’s previous underwriter of auto and home insurance, Ameriprise Auto & Home Insurance, in 2019 and as a result, became Costco’s new underwriter of auto and home insurance.
Costco Health Insurance
Costco used to offer a health insurance plan for individuals underwritten by Aetna called Costco Personal Health Insurance. However, that product is no longer available. Instead, Costco is partnering with the insurance broker Custom Benefit Consultants to offer a health insurance marketplace where customers can search for and purchase health insurance from a large variety of insurance companies.
Available health insurance products on Costco’s health insurance marketplace include plans for individuals, families, small businesses, and large businesses. Individual health insurance plans are available in all states except for Washington D.C., Hawaii, Maryland, Massachusetts, New York, Rhode Island, and Vermont. These health insurance plans are provided by well-known insurance companies such as Cigna, Oscar, and Blue Cross Blue Shield.
Costco Dental Insurance
Costco dental insurance is provided by the Delta Dental Insurance Company under the brand name DeltaCare USA. It is a dental HMO-like plan that is currently available in AZ, CA, FL, MD, NV, OR, PA, TX, and WA. Delta Dental Insurance is the largest dental insurance provider in the United States.
DeltaCare USA is a prepaid plan that features set co-payments, no annual deductibles, and no maximums for covered benefits. Just like in a traditional dental HMO, you choose a primary care dentist in the DeltaCare USA network of dentists from whom you will receive dental care.
Costco Life Insurance
Costco life insurance is provided by Protective Life Insurance Company under the brand name Member Advantage Life Term. It is a term life policy offered with either a 10 or 20 years term. According to Costco, members can save an average of 15% buying term life insurance there.
Protective Life Insurance Company is a major financial service holding company with more than 100 years of history. It offers a myriad of financial products such as life insurance, annuities, disability insurance, and casualty insurance.
Costco Travel Insurance
Costco travel insurance is provided by Travel Guard. Travel Guard is a North American travel insurance provider that specializes in providing travel assistance, insurance, and emergency travel service plans. It was founded in 1982 and acquired by the insurance giant American International Companies (AIG) in 2006.
Travel Guard has a good reputation as a travel insurance specialist. It was ranked number 1 by Forbes on its list of the Best Travel Insurance Companies in 2020.
Costco Auto Insurance Price Comparison
There is no standard pricing for auto insurance. How much you pay depends on your location, car, age, driving record, and other factors. The only way to get a precise price is to submit your information for a price quote.
Top 10 Biggest Insurance Company (Sorted by Ranking)
- State Farm
- Berkshire Hathaway
- Liberty Mutual
- American Family (Costco)
Having said that, it is still instructive to look at the cost of auto insurance on average. If you look at the average insurance premium, Costco auto insurance is one of the best deals on the market. Its average premium is less than 50% of that of Allstate or Farmers auto insurance – a 6-month policy of auto insurance from Costco costs $534 on average, compared to $1,011 from Allstate and $1,395 from Farmers. All in all, Costco claims an average of $615.43 in savings in the first year of switching to its auto insurance.
|Average 6-month Premium||Customer Satisfaction Rating|
(by JD Power)
|How To Apply|
Types of Costco Auto Insurance Discount
Costco’s auto insurance policies are underwritten by American Family Insurance, a Fortune 500 company that is one of the 10 biggest insurers in the United States. The auto insurance rates at American Family Insurance are already highly competitive, but if you buy auto insurance through Costco, you will get additional discounts and extra perks.
American Family Insurance is not saying exactly how much discount you are getting by buying its auto insurance through Costco compared to buying it directly from American Family Insurance itself. Estimates range from 5 percent to 10 percent discount. To be sure that you have the best price, it would be best for you to contact both to compare prices.
There are also many additional ways you can get discounts on your Costco auto insurance:
Costco Insurance Premier Safety
Costco Premier Safety discount is reserved only for those policies where all insured drivers have spotless records. Drivers in these households have not had any traffic violations, accidents, or claims for the past four years. These type of drivers can get up to 20% discount.
Costco Defensive Driving Course
If you take a “refresher” course approved by the Department of Motor Vehicles (DMV) of your state or an accredited organization, you can get Costco’s Auto Insurance Defensive Driver Discount up to 5-15%. All you need to do is to complete the refresher course and present Costco with a copy of your certificate of completion. However, drivers’ education classes or any safety classes you take while learning how to drive cannot be used to get this discount
Costco Auto Insurance Tenure Discount
If you are a long time customer of Costco auto insurance or American Family Insurance, you will get a Tenure discount. Specifically, anyone with more than 3 years of continuous coverage from Costco auto insurance or American Family Insurance will get a discount on their insurance rate
Costco Auto Insurance Multi Car Discount
If you buy Costco auto insurance for more than one car, truck, or van, you will get a lower rate on all of your policies. Costco’s multi car discount can go up to 10%-25%.
Costco Auto Insurance Multi-product Discount
If you buy a bundle of multiple insurance products from Costco, you can get a discount up to 20% with lower rate on all of your policies. Examples of qualified product bundles include auto & home insurance, auto & umbrella insurance, and auto & home & umbrella insurance.
Costco Auto Insurance Garaging Discount
If you park your vehicle overnight in a garage instead of out in the open, you may get an extra discount on your auto insurance. This discount is not available in all regions, so ask your client service representative whether your region is eligible for this discount
Costco Auto Insurance Vehicle Safety & Anti Theft Discount
If your car is equipped with certain safety and anti-theft features, you may receive an additional discount on your auto insurance. Qualified safety and anti-theft features include anti-lock brakes, airbags, automatic seatbelts, and anti-theft devices
Costco Auto Insurance Good Student Discount
If you are a full time student and can prove that you meet certain qualifications, you will get a good student discount up to 15%. A typical qualification is to have a grade point average of B or better.
Costco Auto Insurance Education Discount
If you are a student – or have a student in your family – who completes at least four years of post-high-school education, you may be eligible for the Education discount
Costco Auto Insurance Student Away Discount
If someone in your family is a student who is going away to a school more than 100 miles from your home and does not have a car, you may be eligible for a student away discount. This discount allows you to keep your student driver on your policy so they are covered when driving on weekends or during a break at home. But when they are away in school, you will not pay the full cost of a driver who will not be driving your vehicle every day. This discount does not apply if the student has a vehicle at school
Related: Does Costco Have Student Discount?
Costco Auto Insurance Special Perks
Besides a wide variety of discounts, Costco auto insurance also offers some special perks for its customers. One of the most popular perks was a free Costco gift card for Executive members who bought auto insurance at Costco. Unfortunately, the free gift card perk is no longer available. However, there are still some nice perks that come with Costco auto insurance:
Costco Auto Insurance Roadside Assistance
If you are stranded on the side of a road, roadside assistance coverage will pay for the costs of towing, jump start services, lockout services, spare tire installation, or fluid delivery – for up to $75 per incident. This perk costs extra for regular Costco members, but it comes free if you have an Executive membership
Costco Auto Insurance Lifetime Renewability
This is another free perk that is only available to Costco Executive members. As long as you remain a Costco Executive Member, Costco will promise not to cancel your auto insurance policy no matter how many accidents you get into. But it does not mean you will not have to pay a higher premium after you get into accidents. Also, this promise does not extend to serious infractions – if you get into a DUI incident, you may still get your policy canceled
Costco Auto Insurance Waiving Deductible
If your windshield can be repaired instead of replaced, Costco will waive your deductible. For example, say your deductible is $500 and the cost of repairing your windshield is $300. Since $300 is less than your deductible of $500, under normal circumstances you would be on the hook for the entire sum of the windshield repair cost of $300. With this windshield repair waiver, you do not have to pay anything. Costco auto insurance is paying for the entire $300 windshield repair cost
Costco Accident Travel Expense Coverage
If you get into a car accident more than 100 miles away from home, Costco auto insurance will help pay for your lodging and travel expenses after the accident to get you home
Costco Auto Insurance Coverages
Costco auto insurance provides all the required coverages that you need. They are the standard coverages you also get from all other auto insurance companies, such as:
- Liability coverage for bodily injury and property damage
- Collision coverage
- Comprehensive coverage
- Uninsured or under-insured motorist
- Medical payments
- Personal injury protection.
At the same time, you can also purchase a few optional coverages at extra costs for additional protection:
Costco Roadside Assistance
If you are stranded on the side of a road, roadside assistance coverage will pay for the costs of towing, jump start services, lockout services, spare tire installation, or fluid delivery – for up to $75 per incident. This coverage comes free with Costco auto insurance if you have an Executive membership. For regular members, you would have to pay extra for it
Costco Gap Insurance
If you lease or finance your car with only a small down payment, the amount you owe on your lease or loan is likely to exceed the market value of your car during the early years of your car ownership. In that case, if you totaled your car in an accident, you will owe more than what your regular auto insurance will pay you. Gap insurance will make up that shortfall
Costco Rental Car Reimbursement Coverage
In the case of an accident that damages your car, Rental car reimbursement insurance pays for a rental car while your car is being repaired. It covers up to $30 per day and $900 per incident
New Car Replacement: If your car is totaled in an accident, this coverage will pay for the cost to replace your car with a new one of the same make and model, instead of covering the value of your car at the time of the accident. This coverage is only available to cars that are less than one year old and that have a mileage of fewer than 15,000 miles
Costco Home Insurance Price Comparison
There is no standard pricing for home insurance. How much you pay depends on your location, home condition, home age, coverage amount, and other factors. The only way to get a precise price is to submit your information for a price quote.
To get a general idea of how the price of Costco home insurance compares to those of major insurers, let’s take a look at the price quotes from customer representatives of various insurers for a single-family, 2,200 square feet home in Raleigh, North Carolina:
|Monthly Premium||Customer Satisfaction Rating|
(by JD Power)
|How To Apply|
|Costco / American Family||$73.50||821||Link|
|United Property & Casualty||$98.58||777||Link|
Costco Home Insurance Discounts
Costco’s home insurance policies are underwritten by American Family Insurance. The home insurance rates at American Family Insurance are already highly competitive, but if you buy home insurance through Costco, you will get an additional discount and extra perks.
American Family Insurance is not saying exactly how much discount you are getting by buying its home insurance through Costco compared to buying it directly from American Family Insurance itself. To be sure that you have the best price, it would make sense for you to contact both to compare prices.
How to get discounts on your Costco home insurance
- Age of Home Discount: The newer your home, the greater the discount
- Claims Free Discount: If you haven’t filed a claim in the last 5 years, you get a discount
- Protective Devices Discount: If your home has protective devices, you may get a discount. Qualified devices include smoke alarms, deadbolt locks, security alarms, monitored fire & security systems, sprinkler systems, and fire extinguishers
- Tenure Discount: If you are a long time customer of Costco home insurance or American Family Insurance, you will get a discount. The state you live in determines exactly if and when you qualify for the discount. Ask your client service representative to find out
- Multi-product Discount: If you buy a bundle of multiple insurance products from Costco, you will get a lower rate on all of your policies. Examples of qualified product bundles include auto & home insurance, auto & umbrella insurance, and auto & home & umbrella insurance
- Renovation Discount: If you have completely removed and replaced your roof, heating & cooling systems, or electrical system in the last 9 years, you may get a discount. You may also get a discount if you have completely removed and replaced your entire plumbing system in the last 7 years
Costco Home Insurance Special Perks
Besides a wide variety of discounts, Costco auto home also offers some special perks for its customers:
- Glass Repair Reimbursement: If a window in your home is broken, you will be reimbursed for the repair costs. No need to pay for the deductible. Available for Executive members only
- Home Lockout Assistance: If you are locked out of your home, you can call Costco 24/7 for help. Available for Executive members only
- Identity Theft Protection: If your identity is stolen, your policy will cover up to $5,000 in costs related to recovering from identity theft
- Stolen Credit Card Use or Check Fraud Protection: If your credit card was lost, stolen, or hacked, this will pay for losses due to unauthorized credit card use. And you will not have to pay for the deductible
- Food Spoilage Protection: If you experience a power outage and the food in your refrigerator spoils, this will pay for the replacement of food up to $500
- Lock Replacement Expense Protection: If your home has been broken into or you have been a victim of theft, this will pay for your lock replacement coverage up to $100
Costco Home Insurance Coverages
Costco home insurance provides all the standard coverages you need. They are the coverages you also get from other home insurance companies:
- Dwelling coverage
- Other structures coverage
- Personal property coverage
- Loss-of-use coverage
- Personal liability coverage
- Medical payments coverage
Costco Medical Insurance Comparison
Costco does not offer medical insurance directly. Instead, it is partnering with the insurance broker Custom Benefit Consultants to offer a health insurance marketplace where customers can search for and purchase health insurance from a large variety of insurance companies.
You can find the Costco health insurance marketplace here.
Costco CBC Health Insurance Networks
- Blue Cross Blue Shield
- And more
Costco Medical Insurance Plan Types
- Individual or family plans
- Small business (under 100 employees)
- Large business (more than 100 employees)
- Enterprise (more than 1,000 employees)
- HMO – Health Maintenance Organization
- EPO – Exclusive Provider Organization
- PPO – Preferred Provider Organization
Related: How Much does Costco Eye Exam Cost?
Costco Dental Insurance Price Comparison
There is no standard pricing for dental insurance. How much you pay depends on your state, age, copay amount, coverage amount, and other factors. The only way to get a precise price is to submit your information for a price quote.
To get a general idea of how the price of Costco home insurance compares to those of major insurers, let’s look at the starting prices of various dental insurance in the table below:
|Starting Monthly Premium||Customer Satisfaction Rating|
(by JD Power)
|How To Apply|
|Costco DeltaCare USA||$7.42||N/A||Link|
|Cigna Dental Preventative||$19.00||767||Link|
|Renaissance Essentials Plan||$23.63||N/A||Link|
|Spirit Dental Network 750/1000/1250||$27.60||N/A||Link|
|Humana Dental Preventative Plus PPO||$17.99||774||Link|
|UnitedHealthOne Essential Dental||$20.11||760||Link|
Costco Dental Insurance Special Perks
- No annual deductible
- No calendar year maximum
- Set your own copayment so you know your out-of-pocket costs
Costco Dental Insurance Coverages
Costco dental insurance offers coverage for a variety of dental services, such as:
- Preventive care
- Basic & major treatment
- Orthodontics for children & adults
- Teeth whitening
Costco Life Insurance Price Comparison
Costco only sells one type of life insurance – term life. There is no standard pricing for term life insurance. How much you pay depends on your state, age, health, coverage amount, and other factors. The only way to get a precise price is to submit your information for a price quote.
To get a general idea of how the price of Costco life insurance compares to those of major insurers, let’s take a look at the monthly premiums charged by various life insurers for a 20-year term life insurance with $1 million in coverage for a 35-year old woman in Virginia with average health:
|Monthly Premium||JD Power Customer Satisfaction 2020 Rating||How To Apply|
|Costco / Protective||$51.15||754||Link|
|Mutual of Omaha||$61.28||789||Link|
Costco Life Insurance Special Perks
- Policy cancellation any time at no charge
- Flexibility to adjust your death benefit amount
- No need to make a trip to the doctor for the insurance medical exam – a medical representative will come to you
Costco Life Insurance Coverages
- Term life
- 10 & 20-year
- $100,000 – $5 million coverage amount
- For ages 18 – 75 (18 – 65 for a 20-year term)
Costco Travel Insurance Price Comparison
There is no standard pricing for travel insurance. How much you pay depends on your age, trip destination, trip duration, coverage amount, and other factors. The only way to get a precise price is to submit your information for a price quote.
To get a general idea of how the price of Costco travel insurance compares to those of major insurers, let’s take a look at the cost of travel insurance charged by various insurers for 2 people going on a 7-night trip to the Koro Sun Resort in Fiji that costs $3,469 per person:
|Cost||How To Apply|
|Costco – travelers 55 & 60 yr old||$305.80||Link|
|Trawick First Class – travelers 55 & 60 yr old||$310.31||Link|
|Seven Corners RoundTrip Choice – travelers 55 & 60 yr old||$476.00||Link|
|Costco – travelers 70 & 75 yr old||$611.14||Link|
|Trawick First Class – travelers 70 & 75 yr old||$582.12||Link|
|Seven Corners RoundTrip Choice – travelers 70 & 75 yr old||$890.40||Link|
Costco Travel Insurance Coverages
- Trip Cancellation
- Trip Interruption
- Medical Insurance up to $50,000
- Medical Evacuation up to $1 million
- Baggage Loss or Damage
- Baggage Delay
Benjamin is a certified financial advisor, with over 10 years of experience in the industry. He is knowledgeable about various business and financial topics, such as retirement planning and investment management. Ben has been recognized for his work in the financial planning industry. He has also been featured in various publications.