No, Costco does not underwrite or directly sell auto insurance policies. Instead, through its Costco Auto Program, it partners exclusively with insurance providers like American Family Insurance to offer members access to discounted rates and special policy options. Executive Members can unlock additional savings. This model allows Costco to leverage its member base for group buying power without acting as a traditional insurer.
The partnership with American Family Insurance (AmFam) is the cornerstone of this offering. Costco Members are connected with licensed agents from AmFam who provide personalized quotes. Available coverage typically includes standard auto insurance components like liability, collision, comprehensive, and uninsured motorist protection. The primary draw is potential cost savings; industry analysis suggests members may save an average of $500-$700 annually compared to standard market rates, with specific discounts varying by state, driving history, and vehicle.
For Executive Members, the benefits are enhanced. They often qualify for an extra 20-25% discount on top of the base member rate, alongside potential benefits like accident forgiveness or a diminishing deductible feature. It’s crucial to understand that Costco itself is not the insurer. American Family Insurance underwrites the policies, handles claims, and provides customer service. The program’s strength lies in its curated partnership, aiming to offer vetted value to a demographic known for responsible spending.
Market data indicates that bundled insurance products are a significant factor in consumer decisions. The Costco Auto Program promotes bundling auto with homeowners or renters insurance for greater savings. While not available in every state, the program’s expansion has been consistent, reflecting its adoption. The process is designed for convenience: members request a quote online or via phone, with no obligation to purchase.
Ultimately, the program’s value is highly individual. It is most competitive for members with good driving records seeking a streamlined purchasing experience through a trusted brand. However, as with any insurance, obtaining multiple quotes from different providers remains the best practice to ensure you secure the most suitable and cost-effective coverage.
