Costco Home Insurance Review

Affordable Homeowners' Insurance With Exclusive Discounts for Costco Members

We recommend the best products through an independent review process, and advertisers do not influence our picks. We may receive compensation if you visit partners we recommend. Read our advertiser disclosure for more info.

Costco Logo

 Costco Logo

Headquartered in the state of Washington, Costco is a multi-country wholesale club that offers more than discounted rates on bulk food items and inexpensive hot dogs at its food court. Costco also provides a wide range of services to help members save money in different parts of their lives. You can book travel, order prescription eyeglasses, and purchase insurance. Through CONNECT you can buy homeowners insurance that’s offered by American Family Insurance.

  • Pros & Cons
  • Key Takeaways
  • Company Overview
Pros & Cons
Pros
  • Discounts and perks for Costco members

  • Competitive insurance rates

Cons
  • No service from local agents

Key Takeaways
  • Costco insurance policies are offered by a third-party insurance provider.
  • Members can receive a discount and a handful of perks.
  • Service is through a centralized call center and not local agents.
Company Overview
  • Year Founded 1976
  • Official Website https://www.connectbyamfam.com/costco/
  • Insurance Offered Through Costco Auto, home, business health, business vision, pet, and life
  • Customer Service 1-888-404-5365 Monday through Friday from 7:00 a.m. to 10 p.m. Central and Saturday from 8:30 a.m. to 7 p.m. Central.

Pros Explained

  • Discount and perks for Costco members: While you don’t have to be a Costco member to purchase a homeowners' insurance policy from American Family Insurance, Costco members enjoy a discount. A few perks include lock replacement, food spoilage protection, and stolen card protection.
  • Competitive insurance rates: A major draw to purchasing homeowners' insurance from Costco’s third-party insurer is that you’ll probably get a competitive rate.

Cons Explained

  • No service from local agents: While American Family has some local agents, when purchasing or requesting service through Costco and American Family's CONNECT division you will be dealing with representatives in a centralized call center.

Costco Home Insurance Coverage Plan

Whether purchasing a carton of eggs or a set of new car tires, Costco’s members receive a discount when they shop through the nationwide wholesaler. Costco works with a handful of third parties to extend its services and offerings to customers. Those who are shopping for a homeowners' insurance policy can expect the same.

Through the CONNECT program, you can get a quote for a policy through Costco’s partner American Family Insurance. You don’t need to be a Costco member to purchase a homeowners' insurance policy from CONNECT, but Costco members get a discount and benefits when purchasing through the Costco partnership. Here are some home insurance coverage options:

  • Dwelling Insurance: This covers the cost of damages to your home under a covered peril, such as damage from hail, lightning, a fire, vandalism, or an object falling onto your home. Besides the actual structure of your home, it also can cover an HVAC system, plumbing, heating, and electrical wiring. Attached structures—think garages, an attached porch, a deck—might also be covered.
  • Other Structures Insurance: This covers other structures on your property that aren’t attached to the structure of your home. This could be a gazebo, shed, or garage. It could also include personal belongings in the trunk of your car or a storage unit. There are coverage limits, typically 10% of the dwelling insurance limit. So if your dwelling insurance limit is $200,000, other structures insurance will foot the bill on expenses up to $20,000.
  • Personal Property Insurance: Should your personal belongings get damaged, lost, or stolen, this type of insurance can get them replaced or repaired. As for what exactly is included, it’s typically clothing, furniture, electronics, appliances, and sporting goods.
  • Earthquake Insurance: If you live in a part of the country where there are earthquakes, this can cover damages and loss to your home—both attached and unattached structures—and personal property. This is an endorsement that costs extra money.
  • Mine Subsidence Insurance: If your home is built over a mine, then mine subsidence insurance could help cover the cost to replace or repair your damaged home should the land shift underneath. The states of Illinois, Ohio, Kentucky, and West Virginia require insurance providers to offer this type of coverage.
  • Loss-of-Use Insurance: Should your home be uninhabitable due to a covered peril and you need to temporarily uproot, this will cover the cost of staying in a hotel or an Airbnb while your home is getting repaired. It can also cover the cost of additional expenses, such as eating out because you can’t access your kitchen.
  • Personal Liability Insurance: Let’s say you or a member of your household are responsible for a personal injury or accidental damage to someone else’s property while at your home. Personal liability insurance can cover legal fees and the costs to repair any damage.
  • Medical Payments Insurance: If a guest gets injured on your property or if you accidentally injure someone else while they’re on your property, this could help pay for expenses. This is “no-fault” insurance, which means that the policy can cover expenses no matter who was responsible for the injury.

Factors That Affect Your Cost

While each insurance company may use slightly different criteria, here are the factors they generally consider when determining your rates: 

  • Property Location: Homes near a body of water, such as along the coast, generally cost more to insure. Also, if you live in an area that’s prone to wildfires, your insurance will likely be more expensive.
  • Roof Condition: The better your roof’s condition and the newer it is, the lower your premium will likely be. 
  • Home Characteristics: The size of your home, the materials it’s made of, and if you have a trampoline in the yard or a wood-burning stove in the kitchen all affect the cost of your premium.
  • Claims History: Statistically, if you’ve filed claims before, there’s a greater likelihood that you’ll file a claim in the future, which could bump up the cost of your insurance, as could filing the same claim multiple times.
  • Home Security Systems: The greater your investment in protecting your home and belongings, the less expensive your policy. We’re talking about installing a home alarm, indoor fire sprinklers, deadbolts, or a security camera.
  • Dog Bites: If there’s a history of reported dog bites on your property, your policy will probably be costlier.
  • Credit History: Your credit history doesn’t just affect your ability to get financing; it also affects the cost of your insurance. The stronger your credit score, the lower your premium.
  • Home-Based Business: Because having clients or customers visiting you in your home increases the likelihood of an accident happening, this could potentially up the cost of your policy. And while some of the equipment and supplies for your home-based business might be included in a standard homeowners' insurance policy, not everything will be.

Costco Home Insurance Discounts

CONNECT offers the following policy discounts:

  • Claims-Free Discount: If you haven’t had to file a claim in the last five years, then you might be eligible for a discount on your premium. This is only available in certain states.
  • Home Security Discount: Anything you install to boost the security of your home—a smoke detector, fire sprinklers, security camera, or deadbolts—could reduce your monthly premium.
  • Tenure Discount: American Family Insurance rewards its customers for being loyal. Every year you stay with the company, you may be able to receive a discount on your policy.
  • Multiple Policy Discount: Bundle your policy with other American Family Insurance products, and you can get your rate reduced.
  • Renovation Discount: Invest in your home by way of improvements to keep it modern and in tip-top shape, and American Family Insurance will lower the cost of your policy. The availability of this discount varies by state and could include roof replacement and updates to the plumbing, heating and cooling systems, or the electrical system in your home.

Perks for Costco Members

You don’t have to be a Costco member to purchase a homeowners' insurance policy with American Family Insurance or CONNECT. However, only Costco Executive members purchasing homeowners' insurance from American Family through CONNECT can get the following perks:

  • Member Discount: You get a discount simply for being a Costco Executive member.
  • Identity Theft Protection: The homeowners' insurance policy includes built-in identity theft protection to protect yourself against would-be fraudsters.
  • Stolen Credit Card Protection: Should your credit card get stolen, your homeowners' insurance might be able to cover losses for unauthorized uses.
  • Lock Replacement: Lock replacement coverage can make sure your home is secure after a break-in or theft.
  • Food Spoilage Protection: If your food gets spoiled from a power outage during a storm or an equipment failure, you might be able to get reimbursed.
  • Glass Repair Reimbursement: In the event that an event broke or shattered windows in your home, this will pay to have them replaced. It will cover up to two occurrences over a 12-month period, and each occurrence will be covered up to $1,000.
  • Home Lockout Assistance: Lost your keys and locked out of your home? This service is available to help you around the clock, and you’ll be covered up to $100 per occurrence, limited to two occurrences within a 12-month period.

Other Insurance Options Provided by Costco

Here are one add-on and four endorsements that you can attach to your standard homeowners' insurance policy.

Add-On

Scheduled Personal Property: For high-value items such as jewelry, memorabilia, firearms, stamp or baseball card collections, cameras, computers, fine art, and collectibles, you usually need separate coverage. Scheduled personal property is a type of add-on that you can purchase after you sign up for a standard policy.

Endorsements

Endorsements include additional coverage for:

  • Water Backup and Sump Overflow 
  • Home Media Equipment
  • Adventure Equipment 
  • Personal Injury

Costco Customer Service

You can speak to a member of the customer service team by calling 888-404-5365 Monday through Friday from 7:00 a.m. to 10 p.m. Central and Saturday from 8:30 a.m. to 7 p.m. Central. Customer service is closed on Sunday. You can also get in touch with a human by emailing servicepromise@connectbyamfam.com.

According to the National Association of Insurance Commissioners (NAIC), American Family Insurance has a 2021 complaint index of 1.00, which means the company received an average number of complaints for its size. If you filter just for homeowners' insurance, the index drops to 0.61. This means for homeowners' insurance they received less than complaints than average.

In 2021 there were a total of 50 complaints regarding homeowners' insurance, which was a slight decrease from 59 in 2020. The top complaints were state-specific, had to do with claim handling, and concerned an unsatisfactory settlement or offer, delays, adjuster handling, and claim denial. 

How to Make a Home Insurance Claim

To file a claim with CONNECT powered by American Family Insurance, you’ll need to give them a call or go online and provide facts and details about the damages or loss. From there you’ll be assigned a claims representative, who will work with you on the claims process. 

Costco Home Insurance Cancellation Policy

You can cancel your homeowners' insurance policy by contacting the insurance company.

Other Insurance Provided through Costco

Through Costco you can purchase the following types of insurance, from various providers:

  • Auto Insurance
  • Home Insurance
  • Business Health Insurance
  • Business Vision Insurance
  • Life Insurance
  • Pet Insurance

Whether you’re a Costco member or not, the following insurance categories are available from CONNECT powered by American Family Insurance:

Get a Costco Homeowners' Insurance Quote

You can get a homeowners' insurance quote through American Family’s CONNECT website. Have basics about the property you’d like to insure on hand, along with details about the dwelling and your personal information.

Verdict

Costco’s homeowners' insurance can be a strong choice if you’re a Costco member and looking for an affordable policy. There are also some added benefits that make purchasing insurance through the wholesaler attractive.

However, Connect powered by American Family Insurance doesn’t offer the experience of working with a local agent. Some customers may prefer this personalized service offered by other insurers, especially when needing a claimed handled.

Compare Other Home Insurance Reviews

While you can get an affordable, competitive rate on homeowners' insurance through Costco, it might not be the best rate or the best option for your needs. Shop around and see which providers offer the right coverage for you.

Methodology

Investopedia is dedicated to furnishing consumers with unbiased, comprehensive reviews of homeowners' insurance providers. We reviewed each insurance provider's coverage options, available discounts, customer services, and satisfaction ratings to ensure that our content helps users make the right insurance decision for their needs.

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
  1. National Association of Insurance Commissioners. "American Family Ins Co National Complaint Index Report."