Though it’s not appropriate for everyone, your Costco membership will provide you unique auto coverage.
Costco, the big-box shop, proves once and for all that you can get anything there by providing unique auto insurance to its devoted customers.
Drivers could potentially save hundreds of dollars a year thanks to the company’s wide selection of discounts and benefits.
But even while Costco can be relied upon to offer fantastic discounts on everything from fruit to printer paper, it is reasonable to question whether a discount retailer is the greatest option for purchasing such essential protection.
Costco auto insurance may be the most economical choice available for certain club members, but they may end up spending more elsewhere.
What is the process for Costco auto insurance?
In the majority of states, Costco members have access to inexpensive auto insurance plans through the big-box retailer. Through is the important verb here.
Insurance coverage are not directly issued by Costco. Instead, American Family Insurance, doing business as CONNECT, underwrites the coverage.
For almost 20 years, Ameriprise Auto & Home Insurance’s predecessor, American Family, has offered insurance to Costco customers.
Aside from auto insurance, CONNECT also provides home, renters, specialty, and umbrella insurance.
Costco auto insurance estimates are offered over the phone or on the store’s website.
And it looks that many customers are utilizing the company’s quotes. More than 500,000 Costco customers, according to the retailer, have transferred their auto insurance to CONNECT.
Costco automobile insurance
Although Costco advertises CONNECT as a less-priced option, it still provides the normal coverage choices that drivers would anticipate from their insurance provider.
That covers medical insurance, personal injury protection, and liability, collision, and comprehensive coverage.
The quantity of the discount that Costco members receive upfront isn’t specified, although it is stated that they receive it “just for [their] love to Costco.”
Additionally, like other insurance providers, CONNECT provides a variety of auto insurance discounts for things like defensive driving, completing a driver’s education course, installing safety features like airbags and anti-theft devices, parking in a garage overnight, being a good student, insuring multiple vehicles, bundling with home or umbrella insurance, and being a long-term client.
Additional benefits, like as: are also unlocked with policies purchased through Costco.
• windshield restoration. Policyholders are exempt from paying the deductible for any repairs (but not replacements) for chips.
Executive members’ roadside assistance.
• Up to $75 in coverage is provided for each occurrence, excluding the price of fluids and batteries.
• Executive members are eligible for perpetual renewal. Outside of Michigan and Maryland, policyholders can be confident that Costco won’t revoke their coverage for small mishaps or infractions if they’ve never committed a serious infraction or missed a premium payment.
The advantages of Costco auto insurance
The affordability of this insurance policy is its main selling feature.
Costco boasts that in the first year after switching to CONNECT, its customers saved an average of $587.17. It’s generally less expensive than the major national insurance firms, according to a few independent evaluations.
It’s crucial to remember that not everyone will get these savings, as Costco points out in the fine print on its website. Some people won’t save anything at all.
How much each policyholder pays for insurance is influenced by a wide range of variables, including their credit score, marital status, level of education, and ZIP code. And every business gives those things varying weights.
Nevertheless, the majority of loyal clients appear satisfied with the CONNECT insurance’ coverage and cost. According to Costco, a 2021 study found that over nine out of ten members renew their insurance.
Additionally, you shouldn’t be concerned about the business’s capacity to honor your claim. It has a “A” rating from the credit rating company A.M. Best, indicating that its operating performance is solid and its finances are strong and stable.
Cons of Costco auto insurance
Even if the cost makes you smile, the challenge of filing a claim can make you snap.
The National Association of Insurance Commissioners, which aids in industry regulation and consumer protection, keeps an index of customer satisfaction based on the volume of complaints received by businesses relative to their size.
A company with a 2.0 rating received twice as many complaints as you might anticipate given that the baseline is 1.0.
The NAIC gave American Family CONNECT Insurance Company a 6.31 rating for 2020, which indicates that it received more complaints than was typical for an insurer of its size—more than six times as many. That increased to a 2.15 rating the previous year.
Ratings of 3.0 and above were given to the associated American Family CONNECT Property and Casualty Insurance Company.
Additionally, American Family offers insurance the old-fashioned way, which means there isn’t an app for customers to utilize to submit claims or contact customer service. Although you can report some losses online, you’ll typically need to call to start the claims process.
Even though that seems like a fair exchange, you might not be able to profit from it.
Alaska, Louisiana, North Dakota, Wyoming, Maine, and Rhode Island, according to CONNECT, are not business-friendly states. Costco further clarifies that in New York, insurance goods cannot be “obtained” through the corporation. Additionally, executive members are required to receive the exclusive Costco discount in Massachusetts.
Is Costco auto insurance a good deal?
There’s a fair chance that purchasing your auto insurance through the discount retailer could result in big discounts if you’re already a Costco executive member.
However, it’s well looking into a few alternative options if you’re concerned about customer service and adding to American Family’s backlog of complaints. After all, there are other ways to receive a significant discount besides big-box shopping.
For instance, several states let insurance companies to evaluate the risk you represent as a driver based on your credit history. If your credit isn’t the best, think about investing some time in improving it to see if it opens the door to lower rates.
Dealing with any problematic debt you’re carrying month to month is one of the simplest methods to raise your credit score.
The best strategy to lower your premiums, in the end, is to simply look about for lower rates. As was previously indicated, even though insurers use the same data to determine a premium, they each perform their own computations.
The Insurance Information Institute advises comparing at least three quotations before choosing the best deal for you because of this.