Costco Offers Auto Insurance To Its Members, But Are There Any Perks?

The car-related perks of having a Costco membership are many, ranging from cheap gas to low-priced tires and Kirkland Signature motor oil. And, yes, that has to pass the same tests as the other brands, even when it's less expensive. Looking for auto insurance? Costco offers that, too. And like other member benefits, the company's insurance comes with some notable upsides.

Now, the insurance isn't actually underwritten by Costco. What's happening here is that once you purchase a Costco membership, you can get a unique package of benefits from Connect insurance — which is, in turn, part of American Family Insurance. Things get a little trickier because American Family Insurance is in the process of absorbing the Connect branding into its own. For what it's worth, this company finished in third for overall customer satisfaction in the J.D. Power 2025 U.S. Insurance Digital Experience Study, tying with Progressive and coming out ahead of the likes of State Farm, Allstate, Liberty Mutual, and Geico. It's no wonder more than 500,000 Costco members have taken advantage of their insurance offer so far.

Merely switching from a different insurance company to Connect/American Family can unlock the first perk: Discounts are available just for being a Costco member. Keep in mind, however, that you may want to stop at Costco Optical first, as the hard-to-read fine print includes a long list of disclaimers and exclusions.

Let's jump right in with the Connect/American Family Premier Safety Discount. This one can apply when all the drivers in a given household can show four years' worth of clean driving, without any traffic violations, insurance claims, or accidents — regardless of whether the driver was at fault or not – during that time. Improve your driving skills with a qualifying class from your local DMV (or another accredited group), and you could be in line for the Defensive Driver Discount, too.

Outside of driving skills, there are also discounts that depend on your car having certain built-in safety features. Yes, automakers have to include some ADAS technologies by law, but you can still get Connect/American Family discounts even for low-tech equipment like airbags. On the topic of safety, if you park your car in a garage instead of on the street, you can enjoy further financial benefits. That said, you should probably examine the fine print if that garage is hidden under your house.

Having students in the family can add two additional ways to save. You can receive a discount if you're a full-time student with high enough grades, or if there's a student in the family who lives far enough from home. For folks with a student going to school at least 100 miles away, Connect/American Family won't charge as much as long as they aren't driving their own car.

Car insurance with Connect/American Family can also provide added peace of mind through its complimentary roadside assistance program. For Executive Members, help is just a phone call away to help with common concerns like flat tires or jumpstarts. However, the coverage won't pay for parts. A new battery is out of the question, and so is the gas itself if you run out of fuel. Connect/American Family touts lifetime renewability as well, so your policy won't be cancelled merely because you had to use it after a mishap. (Again, though, we'll emphasize that exclusions apply.)

Speaking of which, if something does go wrong, Connect/American Family is at your service with agents available 24/7. Plus, if problems occur when you're traveling — and at least 100 miles from home — you can be reimbursed for out-of-pocket expenses like the cost of an overnight hotel stay. The insurance can even pay to have your windshield repaired if it gets cracked, and the company will waive the typical glass-repair deductible as long as it doesn't need to be replaced.

As for the bottom line, the folks at Insurance Business America say "Costco's annual premiums are between $50 and $400 cheaper" than the other insurers they evaluated. That said, Costco couldn't crack the top 15 in the Consumer Reports list of best car insurance companies, so your mileage may vary.