Does Costco Offer Home Insurance?

Although Costco does not underwrite its own homeowners insurance policies, the retail corporation does provide discounted insurance rates to its members through its partnership with CONNECT, a subsidiary of American Family Insurance. Switching to Costco’s home insurance may be worthwhile if you are already a member who regularly shops at Costco, but depending on your circumstances, the insurance savings may not be enough to offset the cost of a new membership.

Keep reading for more Costco home insurance reviews to help you understand the benefits and drawbacks of Costco coverage and whether switching to a CONNECT policy makes sense for you.

Key Takeaways In most states, Costco members are eligible for discounted home insurance rates from CONNECT, and they may qualify for additional discounts by purchasing a new home, taking home protection measures, replacing their roof or bundling policies. The vast majority of Costco members rated CONNECT well in a 2022 survey, although the insurance company did receive a larger number of customer complaints than expected given its market share on the whole in 2023. Policies through Costco Insurance Agency are not currently available in California, Florida or New York. If you aren’t already a Costco member, switching to Costco homeowners insurance may not make sense unless the amount you would save on your annual premium is greater than the $65 to $130 you would have to spend on annual membership fees. Costco Executive Members automatically qualify for extra benefits through CONNECT, including glass repair reimbursement and home lockout assistance.

Costco Home Insurance Overview

Homeowners insurance is one of the many benefits that Costco members can access at a discounted rate, with individuals in most states qualifying for reduced home insurance premiums from CONNECT simply by joining Costco. Over half a million Costco members have switched to an insurance policy underwritten by CONNECT.^[1]

Not all Costco members save money by switching to CONNECT, but Costco’s insurance programs can lead to substantial savings for certain policyholders. For example, among members who reported saving money by switching to Costco auto insurance in 2022, the average annual premium decrease was $595.86. As a result, 90% of Costco members covered by CONNECT end up renewing their policies.^[1]

Costco Home Insurance Customer Ratings

A 2022 survey of Costco insurance policyholders conducted by Costco found that 89% of respondents gave CONNECT at least 4/5 stars for customer satisfaction.^[1] That said, CONNECT’s customer satisfaction performance as a whole is not outstanding, as the National Association of Insurance Commissioners (NAIC) found that CONNECT received more than double the number of home insurance complaints expected for an insurer of its size in 2023.^[2]

What Are the Pros and Cons of Costco Home Insurance?

Pros	Cons
Costco members automatically earn a discount in most states, and additional discounts are available	Coverage is not currently available in all states, and some discounts are restricted to certain states as well
89% of surveyed policyholders gave CONNECT a good customer satisfaction score	Joining Costco requires an annual membership fee, which could counteract insurance savings for some policyholders
Additional coverage automatically applies to Costco Executive Members

Where Is Costco Home Insurance Available?

Costco Insurance Agency is not currently selling new Costco home insurance policies in California or Florida, and it is not licensed to operate in New York, but insurance coverage may be available through Costco in other states. Nevertheless, the availability of certain benefits may vary from state to state. For example, Costco members in Tennessee do not automatically qualify for a discount on their CONNECT home insurance rates.^[1]

You should also note that there are no Costco warehouses in Rhode Island, West Virginia or Wyoming.^[3] While you may technically be able to become a Costco member just for the insurance benefits in these states, joining the warehouse club costs between $65 and $130 per year, so it may not be the most cost-effective option if you don’t also have access to a Costco retail store.^[4]

What Does Costco Home Insurance Cover?

A standard Costco homeowners insurance policy from CONNECT should include the following six core coverage types:

• Dwelling: Dwelling insurance covers the structure of your home and structures that are directly attached to it, such as patios and carports.
• Other structures: Other structures coverage insures structures on your property that are not directly attached to your home, such as sheds and fences.
• Personal property: Personal property insurance provides coverage for your belongings, such as electronics and furniture.
• Loss of use: If your home becomes uninhabitable because of a covered peril, loss of use coverage can pay for temporary living expenses, like hotel stays and laundromat costs.
• Personal liability: Personal liability insurance can take care of another person’s medical bills or property repairs if you are held liable for injuring them or damaging their property, while also covering your legal expenses if someone sues you over a liability claim.
• Medical payments: Medical payments coverage offers limited coverage for a guest’s medical expenses after they are hurt on your property, but it won’t cover legal expenses.

Your home and other structures on your property are typically insured on an open peril basis, meaning all sources of damage are covered except for those that are expressly excluded by the policy. Conversely, your belongings are usually covered on a named peril basis, which means your insurer will only cover damage from the following 16 perils:

Fire or lightning	Theft
Windstorm or hail	Volcanic eruptions
Explosion	Falling objects
Riot or civil commotion	Weight of ice, sleet or snow
Damage by aircraft	Water/steam discharge from home systems and appliances
Damage by vehicle	Sudden/accidental tearing, cracking, burning or bulging of home systems
Smoke	Freezing of home systems
Vandalism or malicious mischief	Sudden/accidental power surges

If you are a Costco Executive Member, your CONNECT homeowners insurance policy may automatically include home lockout assistance and reimbursement of up to $1,000 twice per year for glass repair. In addition, you may be able to add the following optional coverage types to your policy:^[1][5]

Identity theft protection	Service line coverage
Stolen credit card use and check fraud protection	Equipment breakdown insurance
Refrigerated property coverage

What Isn’t Covered?

Examples of perils that likely won’t be covered by your Costo home insurance policy include the following:^[6]

Water damage from external sources, like flooding, sewer backups and sump pump overflows	Enforcement of building codes
Earth movements, including earthquakes, sinkholes and landslides	Pollution
Power failure	Gradual damage
War or nuclear hazard	Mold
Intentional losses	Termites

Does Costco Offer Home Insurance Discounts?

On top of the exclusive discount on home insurance that is broadly available to Costco members in most states, you may also qualify for additional savings through the following discounts, depending on where you live:^[5]

• New home: You may be eligible for a discounted home insurance rate after you purchase a new home, whether the house was recently built or is simply new to you.
• Home protection: There are various steps you may be able to take to earn a home protection discount, such as installing sprinklers in every room in your house or setting up a burglar or fire alarm.
• Roof replacement: If you have replaced your roof within the last nine years, you may qualify for an insurance discount, as long as the roof replacement was completed by a licensed contractor and adheres to local building codes.
• Multi-product: Another way to secure lower premiums is to bundle insurance policies, which means buying multiple CONNECT insurance products, like home, auto and umbrella insurance.

What Is the Cancellation Policy for Costco Home Insurance?

If you would like to cancel your Costco homeowners insurance policy, you will generally need to go through CONNECT rather than Costco. CONNECT’s parent company, American Family Insurance, recommends contacting your insurance agent directly to cancel your policy, though you may also be able to request cancellation assistance by calling American Family’s customer care center at 1-833-381-1155.^[7]

Keep in mind that, if you are still paying off your mortgage, you are likely required to maintain home insurance.

As a result, it’s important to make sure you have a new homeowners insurance policy in place before you cancel your current Costco insurance policy so you can avoid a lapse in coverage.

How To File a Costco Home Insurance Claim

These are the steps you need to take to file a claim on your Costco homeowners insurance policy after a covered loss:

1. If your claim is related to a crime, like vandalism or theft, call 911 and ask the responding officers to complete a police report.
2. Get in touch with your insurance company via phone, mobile app or online portal to initiate the claims process and schedule an appointment with an insurance adjuster.
3. Ask local contractors for repair estimates, and take pictures or film videos to thoroughly document the damage to your property.
4. Prevent unnecessary damage by conducting emergency repairs, as needed.
5. Keep your mortgage lender in the loop regarding your insurance claim.
6. Present relevant evidence to your insurance carrier’s adjuster, including pictures and videos, police reports, repair estimates and home inventories.
7. Save any documents, invoices, receipts or contracts that are relevant to your claim.
8. Pay attention to the status of your claim, and fill out paperwork or take care of issues that come up, whenever necessary.
9. Use your insurance payout to finish repairs, or contact a lawyer or public adjuster if you believe the settlement is too low and want to dispute it.