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There’s a lot to love about Costco. The company has deals on just about every type of product you could need — from food and clothing to tires and prescriptions — and for lots of services.
And you might already be a fan of Costco’s Top Tier gas for your car. But did you know that in addition to homeowners insurance, Costco members can go through the company for their car insurance needs? Before you get car insurance through the wholesale retailer, here are five things to know:
I’ve written in detail about how car insurance works. Here’s the gist: You pay an insurer a monthly or annual premium, and the insurer offers you financial protection if you’re in an accident down the line.
With this in mind, Costco doesn’t actually offer insurance. You won’t pay Costco premiums and Costco won’t be who you will call to file a claim. Instead, Costco acts as an insurance facilitator by linking its members with CONNECT Insurance, which is a subsidiary of American Family Insurance (AmFam).
To qualify for car insurance through Costco, you need to be a Costco member. A basic membership is $60 annually, or you can get an executive membership for $120 a year. Then — if you buy insurance through Costco — your insurer will be CONNECT.
When it comes to how CONNECT performs as an insurer, here are a couple of things to know:
Remember: Once you sign up for car insurance through Costco, you’ll be dealing with CONNECT for all your insurance-related needs. So, it’s worth looking into how CONNECT performs when it comes to overall customer satisfaction and claims handling.
When it comes to coverage, CONNECT offers all the standard options as other insurers. This includes:
You can also choose from several add-ons like roadside assistance and towing. But money expert Clark Howard doesn’t recommend getting roadside assistance from your insurer.
CONNECT also offers rental car insurance to cover rentals when your car is out of commission. And you can get gap insurance through CONNECT. We’ve got a guide to help figure out whether gap insurance is worth it for you.
In addition to standard coverage options, Costco members may have access to additional benefits with a CONNECT auto insurance policy. Here are a few:
CONNECT also offers members “hassle free claims.” The company says their goal is to, “make our claims process as pain-free as possible.” As part of this pain-free process, members can report an accident 24/7, expect to be contacted within 24 hours of reporting a claim, and choose where they want their car repaired.
As you can see, each of these benefits has criteria that must be met. For example, if you don’t have comprehensive coverage then you don’t get stolen key coverage. And depending on where you live, benefits may vary.
I’ve yet to find an auto insurer that doesn’t offer discounts to its members. As expected, CONNECT has a list of ways that members can save money on car insurance. Their offerings are typical for the auto industry, and include discounts such as:
California residents also may qualify for a Good Driver Discount, which is awarded to members who have a history of safe driving. You might also qualify for a College Degree Discount if you have a bachelor’s degree or higher. This discount isn’t listed on the CONNECT website’s discount page, but it was an option for me when I got a quote for coverage.
In the world of auto insurance, there are so many factors that influence what you pay. Some of those factors — your driving history, the car you drive, how high you set your deductible, etc. — are in your control. But at the end of the day, insurance companies often weigh these factors differently. As a result, your insurance rate may vary greatly across multiple insurers.
For me, CONNECT doesn’t offer the best deal. To see if they’ll offer the best rate for you, you have to get a quote from CONNECT and other companies. We’ve got a guide on how to shop around for car insurance to get you started. And even if you’re not a Costco member, you can still get a quote from CONNECT to see how much you could save.
Costco is known for offering members savings on just about everything. But car insurance might be an exception. For one, Costco doesn’t technically sell insurance. If you sign up for car insurance through Costco, you will be insured by CONNECT, which is backed by American Family Insurance.
Another thing worth noting is that most of what CONNECT offers members — from coverage to discounts — can be found with other insurers. So, the only way to find out if this “deal” is a good one for you is to shop around and compare quotes.
And even if CONNECT offers the lowest rate, remember this: The “best” insurance isn’t necessarily the same as the insurance company offering the lowest rates. Make sure you are comparing equal amounts of coverage from any company you consider. Then, be sure to take time to read reviews on how the company handles claims. Clark says:
“Sometimes you’re better off paying a little more to be with a quality insurer who will be there when the chips are down.”
We’ve got a list of some of the best car insurance companies — backed by data on claims handling — when you’re ready to start shopping around!
This post was last modified on April 29, 2024 7:40 am
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