Many people rely on Costco for their shopping needs. Not only do you find great deals on things like groceries, electronics, patio furniture, and cleaning supplies, but some of their food court offerings are the stuff of legend.
But what might surprise you is that Costco offers even more services, like travel booking, home improvement work, and even insurance policies. Whether you’re hunting around for a new auto policy or looking for the best pet insurance, Costco might have a policy that could work for you.
Let’s look at what Costco’s insurance offers and whether Costco really has everything you need, all in one place.
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What insurance types does Costco offer?
There are multiple types of insurance coverage available through Costco, including auto, home, and renters insurance. Life insurance and various types of health insurance for small businesses are also available.
You could also get Costco pet insurance to help you cover large vet bills, but it’s always smart to compare the insurance premium quote you receive to some of the best pet insurance available.
If you’re already a member, you may be eligible for these programs as a part of your Costco membership benefits and receive a discount on your insurance coverage. Executive and Business Executive members may receive additional discounts or benefits based on the types of policies and coverages they select.
How does Costco insurance work?
Although Costco doesn’t sell insurance directly, it provides discounts and benefits to members that get insurance quotes through its services and partners.
If you’re a Costco member, reviewing what it offers could save you some money on insurance. However, you aren’t guaranteed to find cheaper insurance through Costco, and you may be able to find better rates or more coverage by shopping around.
Costco offers a variety of insurance policies and benefits to its members through partnerships with major insurance companies:
Costco car insurance
Costco offers member discounts on auto insurance policies sold through its CONNECT platform, a division of American Family Insurance. Costco offers multiple types of coverage, including comprehensive and collision, bodily injury, uninsured motorist, and medical expenses.
Costco also offers roadside assistance, towing, and rental car insurance, should you need to rent a car following an accident. Benefits may also include a windshield repair deductible waiver that enables you to get your windshield repaired rather than replaced without paying a deductible.
In addition to the discounts that members receive, the CONNECT platform also offers multiple additional discounts. Some of the discounts are for people with safe driving records, good students, and students away from home.
You might also receive a discount if you keep your car in a garage or have safety devices like airbags, anti-lock brakes, automatic seatbelts, and anti-theft devices. Costco also offers multi-car and multi-policy discounts.
It’s important to note that coverage options and discounts might vary by state or may not be available based on where you live, so be sure to investigate thoroughly before signing up for a policy.
Costco home insurance
Costco offers home insurance through the CONNECT platform from American Family Insurance. Basic dwelling coverage is available, covering repairs or replacements to your home up to the coverage amount you select. This type of coverage could protect you in events such as a lightning strike, fire, smoke, wind, hailstorm damage, vandalism, or damage done by a vehicle or airplane.
However, this insurance does not cover damage done by sewer backups or lack of maintenance. While earthquake and flood coverage is not included in the regular dwelling coverage, you could purchase additional policies for each if you need it.
Some of the additional benefits members receive from the home insurance policies include home lockout assistance, identity theft protection, and even wildfire loss prevention in certain states.
Discounts may be available based on the age of your home and the renovations you make, such as replacing the roof, electrical, or plumbing in an older home. Home safety devices like smoke alarms, fire extinguishers, and security systems may provide further discounts.
Costco vision and dental insurance
Costco offers optical services in some of its stores, but it also offers vision insurance to small businesses through MESVision, one of its insurance partners.
Costco vision insurance is not available for individuals. However, if you’re a small business owner, you could create a benefits plan for your employees with Costco membership pricing.
Employees could use their benefits at Costco locations that offer optical services, where they would pay zero out-of-pocket expenses. Costco vision insurance could also be used at in-network providers, but some deductibles may apply.
Dental coverage is available for small or large businesses, but not all benefits are available in every state. Costco used to offer individual dental coverage through Delta Dental, but it’s no longer available since April 29, 2022.
Costco health insurance
Costco provides health insurance quotes provided by the CBC Health Insurance Marketplace. These plans are designed for businesses and could be accessed via a Costco membership.
The CBC Marketplace associates could help employers navigate the Affordable Care Act, COBRA, and other benefits included in their plans. The CBC Marketplace offers quotes for add-on benefits like dental, vision, life, or disability coverage from various insurance companies.
Not every coverage is available for every state, so if you’re a business owner searching for an employee benefits plan, make sure to shop around and get multiple quotes.
Costco used to offer individual and family health plans, but it no longer does due to what it views as “instability in the individual and family health insurance market.”
Costco life insurance
Life insurance is an essential part of many people’s estate plans. It helps your family replace lost income in the event of your death, so they don’t have to worry about finances while grieving.
Costco members could purchase up to a 20-year term life policy valued between $100,000 and $5 million through Protective Life, one of Costco’s insurance partners. Members who apply for life insurance would undergo a medical exam to confirm eligibility and final rates.
Once approved, policyholders may be able to adjust the death benefit up or down based on changes in your family. However, adding additional coverage may require you to take another medical exam.
Pros of buying insurance from Costco
There are several benefits that Costco members may receive when they obtain an insurance policy through Costco:
- Saving money: Buying Costco auto insurance might help some people save money. Costco Executive members may be eligible for additional discounts on their auto policy, roadside assistance, and glass repair benefits.
- Customer satisfaction: According to Costco, 400,000 members use the American Family Insurance auto coverage through CONNECT, and 9 out of 10 members renew the policies they purchased.
- Robust home coverage: Costco members may receive a discount on their homeowners' insurance and be eligible for additional benefits like identity theft, stolen credit card, and check fraud protection. You could even enjoy protection such as food spoilage protection, which would cover up to $500 to replace spoiled food if your power goes out during a storm, equipment failure, or construction accident.
- Trusted insurance provider: American Family Insurance, which provides auto and home policies offered by Costco, is considered an insurance agency with robust financial strength. It has an A rating from AM Best, a credit rating agency for the insurance industry. J.D. Power gave it an average score of 862 out of 1,000 in their 2020 Auto Insurance Claims Satisfaction Study.
Cons of buying insurance from Costco
If you’re considering the pros and cons of Costco membership just for insurance savings, there are certain disadvantages you should keep in mind:
- Limited coverage: Insurance plans offered by Costco are not available in every state and there may be varying coverage levels based on your location. Getting connected with an insurance agent might also be limited through the Costco insurance platforms. You may want to look elsewhere if building a personal relationship with an agent is essential to you.
- Cost of Costco membership: Costco memberships range from $60 to $120 per year, based on your chosen level. You might not save much money if you aren’t already a member or aren’t eligible for the lowest rates based on driving history or other factors.
- A high number of complaints: While Costco claims that 9 out of 10 members renew the policy they purchased, there are reports of customer service complaints. The National Association of Insurance Commissioners, which keeps a database of all insurance reviews and complaints, gave American Family CONNECT a 2.5 complaint ratio, which means the insurer got twice as many complaints as expected in the market.
- Some plans are only for businesses: Unless you’re a business owner searching for medical, dental, or vision insurance for your company, you might not benefit from the CBC Marketplace. Costco no longer offers health, dental, and vision insurance for individuals.
Is Costco insurance the right choice for you?
Choosing insurance is a process that may take several quotes before making a final decision. Remember that many different factors impact the amount you might pay for insurance, including your age, gender, where you live, and even your credit score.
Costco insurance might be a good option if you’re already a Costco member. You could save money on your auto insurance or if you’re eligible for the added benefit services like roadside assistance and glass repair.
Getting insurance from Costco may also be a good idea if you have other types of vehicles, like an RV, ATV, boat, or classic car, to insure along with your primary vehicle or bundle with a homeowners policy.
Homeowners interested in identity theft protection and fraud prevention or living in a place prone to wildfires, floods, or earthquakes might find Costco insurance worthwhile.
Make sure to compare Costco’s insurance rates with other insurance companies. Rental property owners may also benefit from comparing coverages and rates against their existing policy since some of the benefits homeowners receive may also be available to them.
If you’re a small business owner, using the CBC Marketplace to compare healthcare plans you could offer your employees might save you some time and energy. This marketplace displays coverages from multiple companies in one place.
FAQs about Costco insurance
Does Costco have good health insurance?
Costco health insurance, which is only available to businesses, might allow employers to save some money using the perks of their Costco membership.
Costco provides a marketplace for employers to compare health plan benefits they’d offer their employees. The marketplace allows business owners to compare quotes and offerings from multiple insurance companies based on their business needs.
If you’re an individual looking for your coverage, you should keep in mind that Costco no longer offers individual or family health plans.
Does Costco offer members insurance at a discount?
Costco members may receive additional discounts on some insurance policies, but these discounts depend on your specific situation. Auto and home policyholders may be eligible for discounts when bundling their policies or insuring more than one vehicle through Costco.
Do Costco employees get free insurance?
Costco says that it offers affordable — but not free — health care coverage to full-time and part-time employees, among other benefits. Employees are not eligible for additional discounts or free insurance from Costco’s insurance partners.
Costco insurance products might be a helpful tool, depending on the insurance coverage you’re looking for.
Using the Costco marketplace to compare rates and policies across multiple providers might save business owners some time. If you’re an individual looking for a car or home policy, you might be able to save money over other available options.
When researching insurance policies, decide the coverage that best fits your needs versus your income level. It’s also essential to find out if a home and car insurance bundle might save you money and how to switch car insurance if you decide to make a move to Costco.
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