Costco Home Insurance: Is It Worth It?

Costco, a multi-country wholesale club, is renowned for its discounted rates on bulk products, rotisserie chicken, hot dogs and now homeowners insurance. Home policies purchased through Costco are administered by CONNECT by American Family (AmFam), a national insurance carrier. Non-Costco members can still purchase a policy from AmFam but Costco members receive a discount on their policy premium.

Note: Costco does not underwrite insurance policies, pay claims or guarantee any of its products — these are all handled by AmFam. Throughout this Costco homeowners insurance review, we will still refer to the policy being issued by “Costco/AmFam.”

Overview

Availability	Not specified
Pricing	Varies
Coverage	Dwelling Additional structures Personal property Liability Medical payments (for others) Loss of use
Endorsements	Earthquake Identity theft protection Stolen credit card use/check fraud protection Refrigerated property/spoiled food Service line Equipment breakdown Home glass repair reimbursement Home lockout assistance Wildfire loss prevention and response services Scheduled property Water backup and sump pump overflow Adventure equipment Home media equipment Personal injury
Discounts	New home Claims-free Safety and security devices Tenure Multi-policy New roof New HVAC, electrical or plumbing system
Customer Support	Customer service: 1-888-239-9953 servicepromise@connectbyamfam.com File a claim: 1-800-872-5246  csc@connectbyamfam.com  Mailing address: American Family Insurance Claims Services, Inc. 6000 American Parkway Madison, WI 53783-0001 Mobile app

Good For:	Bad For:
Costco Members	Homeowners without Costco membership
Accident-prone drivers

Pros & Cons

Pros	Cons
Automatic discount for Costco members	Online quotes not available nationwide
Wildfire loss prevention available in some states	Relatively small agent network
Costco Executive members enjoy additional benefits

Pros

• Automatic discount for Costco members: Enjoy a discount on your policy premium just by being a Costco member.
• Wildfire loss prevention available in some states: Homeowners in Arizona, California, Colorado, Nevada, Oregon and Washington may qualify for wildfire prevention and defense resources at no additional cost.
• Costco Executive members enjoy additional benefits: Home glass repair reimbursement and home lockout assistance are added to your home insurance policy if you have a Costco Executive membership.

Cons

• Online quotes not available nationwide: SmartFinancial was unable to initiate the quote process in Alaska, Hawaii, Louisiana, Montana, New York, South Carolina or Vermont. You may need to call to request a quote or Costco/AmFam policies may not be available in these locations.
• Relatively small agent network: AmFam’s network of 3,000 agents nationwide (includes affiliates Homesite and The General) is relatively small when compared to other large carriers, like State Farm with its network of nearly 20,000 insurance agents. A personalized service experience may be inaccessible to consumers who do not live near an AmFam office.

Get Personalized Home Insurance Quotes Here

State Availability

Costco states that insurance products are not sold through the Costco Insurance Agency in New York. Besides New York, Costco does not specify which states Costco/AmFam home insurance policies are available or unavailable.

Online quotes may not be available in certain states. Using a sample zip code from each state, SmartFinancial was unable to generate an online quote in the following states:

• Alaska
• Hawaii
• Louisiana
• Montana
• New York
• South Carolina
• Vermont

However, this should not suggest that Costco/AmFam policies are not sold in these states (except New York). Instead, AmFam directs you to call a number for additional support. For South Carolina, we were directed to a partner carrier that also sells coverage — however, the Costco membership discount may not be applicable.

Consumers should note that their policy may be underwritten by an AmFam affiliate that does not carry “American Family” in its name  For example, some policies are underwritten by Homesite Insurance Company, a Boston-based affiliate of AmFam.

What Does Costco Home Insurance Cover?

Costco/AmFam homeowners insurance policies will carry all standard coverages, including dwelling, personal property and liability protection.

Coverage	Description
Dwelling	Pays for the cost to rebuild your home if it is damaged from a covered claim
Additional structures	Covers damages to structures besides the structure you live in (e.g., fences, detached garages, sheds)
Personal property	Covers your personal belongings when damaged or lost due to a covered peril, such as fire, theft or vandalism
Personal liability	Pays for liability expenses, like medical bills or legal fees, if you’re sued by somebody who suffered bodily injury or property damage while on your property
Medical payments (for others)	Optional coverage that pays the medical bills of somebody who suffered injuries while on your property, usually up to $5,000
Loss of use	Pays for additional living expenses, like hotel bills and meals, while your home is inaccessible after a covered claim

Covered Perils

A standard home insurance policy by Costco/AmFam will protect your home and personal property from all 16 common perils. This includes weather- and people-caused losses, such as those from fire, windstorms, vandalism and theft. You’re also insured for damages caused by your home’s internal systems, like sudden power surges or steam discharge from a home appliance.

Covered Perils in a Standard Homeowners Insurance Policy
Fire or lightning Windstorm or hail Explosion Riot or civil commotion Damage by aircraft Damage by vehicles Smoke Sudden/accidental tearing, cracking, burning, or bulging of home systems	Vandalism or malicious mischief Theft Volcanic eruption Falling objects Weight of ice, sleet, snow Freezing of home systems Sudden/accidental power surges Water/steam discharge from home systems and appliances

Optional Endorsements

Costco/AmFam sells additional coverage to expand the protection in your home insurance policy. Some of these coverages are automatically included with your policy depending on your Costco membership level and state.

• Earthquake: Insure your home’s structure and personal belongings from damages caused by earth tremors.
• Identity theft protection: Gain up to $5,000 in recovery costs when you become a victim of fraud and identity theft.
• Stolen credit card use or check fraud protection: Covers losses that arise from unauthorized credit card use — a welcome relief when you discover charges you never made on your statements. No deductible will apply.
• Refrigerated property coverage Whether your fridge goes out during a storm, mechanical failure or some physical accident, Costco/AmFam will pay you for the spoiled food in your refrigerator and freezer.
• Service line coverage: Sewer pipes, gas lines, electric lines and other service lines that run from your house to the public street may be covered if they fail from rust, deterioration, tree roots and more.
• Equipment breakdown: Covers repair or replacement costs when your washing machine, stove, fridge or other appliance suddenly fails from a mechanical failure or electrical surge. Losses from lack of maintenance or wear and tear are not covered.
• Home glass repair reimbursement: Whether a baseball or a stray branch launches through your window, Costco/AmFam will reimburse you for your window’s repair costs. You’re capped at two claims (up to $1,000 per occurrence) within a 12-month period.
• Home lockout assistance: If you accidentally leave your house keys inside, you can arrange for a professional to help you regain access to your home. Costco/AmFam will cover a maximum of two claims (up to $100 per occurrence) within a 12-month period.
• Wildfire loss prevention and response services: AmFam has connected with Wildfire Defense Systems, a wildfire risk management service, to help homeowners prevent, mitigate and recover after a wildfire. If a wildfire occurs in your area, WDS may deploy a crew of fire protection contractors to defend your property. Automatically included with qualified policies at no additional cost.
• Scheduled property coverage: Increase the limits for personal belongings subject to sublimit in a standard policy, including jewelry, computers, firearms, silverware and art pieces.
• Water backup and sump pump overflow coverage: You’re covered for losses resulting from water backup due to a sump pump failure or sewer backup. Water damage from floods is not covered.
• Adventure equipment coverage: Gain replacement cost value coverage for golf clubs, skis, fishing equipment, bicycles and other equipment not covered in a standard home insurance policy. No deductible will apply.
• Home media equipment: Enjoy increased coverage for your TVs, computers, cameras, cell phones, blu ray players and other media equipment. Available in $2,500-, $5,000- or $10,000-increment limits.
• Personal injury endorsement: Gain protection when you’re accused of malicious prosecution, slander, defamation, libel, privacy invasion or some other personal injury offense to another party.

Costco Home Insurance Discounts

Below, we’ve compiled homeowners insurance discounts that Costco/AmFam offers and how to qualify. Discount availability may vary by state.

• Age of home: Purchase a newly built home.
• Claims-free: Don’t file an insurance claim within the past five years.
• Safety and security devices: Install safety devices (e.g., fire and smoke detectors) and security devices (e.g., video doorbells, security cameras).
• Tenure: Stay insured with Costco/AmFam for at least one year.
• Multi-policy: Purchase a second insurance policy along with your homeowners policy. AmFam sells renters, condo, flood, umbrella, motorcycle, RV and auto insurance. Read our Costco car insurance review.
• Roof replacement: Completely replace your roof within the last nine years. A new layer added on top of old shingles will not qualify for this discount.
• Heating and cooling renovation: Completely replace your heating and cooling systems within the last nine years.
• Electrical renovation: Completely replace your electrical system within the last nine years.
• Plumbing renovation: Completely replace your plumbing within the last seven years.

Renovation-related discounts only apply if the work was completed up to local codes by a licensed contractor. Proof of repairs may be required.

Customer Ratings

According to the National Association Of Insurance Commissioners, American Family has a complaint index of 0.61, which is good. To compare, a score of one indicates the company has an average number of complaints for its size. If you filter for only homeowners insurance, the score improves to 0.20, suggesting AmFam home policyholders are pleased with their service.

Costco/AmFam surveyed its home and auto policyholders and 89% of Costco members rated four or 5 on a five-point scale for client satisfaction.

Costco Home Insurance Cancellation Policy

Since AmFam underwrites the policy, you will need to contact them to cancel your home insurance policy, not Costco. AmFam recommends calling the company as the most convenient way to cancel a policy.

If you’re canceling your Costco home policy, avoid creating a lapse in coverage. You can generally cancel a homeowners insurance policy at any time but you should always have a new policy in effect first to avoid a lapse in coverage.

If you have a mortgage, your lender requires you to maintain continuous coverage. A lapse in coverage violates that agreement and could lead to higher premiums when you buy a policy in the future.

Get Personalized Home Insurance Quotes Here

Key Takeaways Costco homeowners insurance is issued and administered by CONNECT by American Family. American Family automatically applies a discount towards the home insurance premium for Costco members. A Costco/AmFam home insurance policy carries standard coverage, including dwelling, personal property and personal liability protection. Costco/AmFam policyholders can add home media equipment, scheduled property coverage, identity theft protection and other endorsements to their policy at an additional cost.

Not a Costco member? Costco/AmFam home insurance offers some unique perks and discounts but no worries if you don’t hold a Costco membership. SmartFinancial’s free online tools can provide additional options for insuring your home. Just enter your zip code below or call 855.214.2291 to receive your free homeowners insurance quotes.