Home Insurance Costco – It’s no secret that Costco is financial expert Howard’s favorite place to shop. You can buy many different things there, from food to clothes to hardware. But did you know you can also buy home insurance through Costco?
If you’re considering purchasing home insurance through Costco, here are five things to keep in mind:
Home Insurance Costco
The first thing to know is that Costco doesn’t actually sell insurance. When you buy insurance, you pay a company to take on the risk of protecting your property from damage or loss. The company is the sponsor.
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Costco is simplifying the process for members to apply for home insurance through CONNECT Insurance. CONNECT, a subsidiary of American Family (AmFam) Insurance, will be your insurance carrier.
You don’t need a Costco membership to buy insurance directly from AmFam, one of the top 10 insurance companies in the country. But buying a policy through Costco can give you access to deals and discounts you wouldn’t otherwise get (which I’ll talk about later in this article).
A basic Costco membership costs $60 a year, but you can get more home insurance benefits with a premium membership, which costs $120 a year. Here, the team compares the value of a Costco Gold Star (Basic) membership to an Executive membership.
From a financial perspective, CONNECT is a solid insurance company. The company has an “A” rating from the insurance credit rating agency A.M. The most suitable because of its financial strength based on financial security and the ability of the company to pay claims. On his website, A.M. Best said the “A” rating means the company has an “excellent ability to meet its ongoing insurance obligations.”
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It is recommended to pay attention to A.M. for top marks if you’re buying term life insurance, but for home insurance he says price and customer service are more important.
When it comes to customer service, CONNECT has less than stellar reviews. According to the 2021 National Association of Insurance Commissioners (NAIC) Complaint Trends Report, CONNECT received a higher number of customer satisfaction-related complaints than average for companies of its size.
CONNECT currently has a NAIC rating of 1.31. On the NAIC scale, a score of 1.00 is considered average, and a score above that means the complaints against the company are “above average.” Complaints range from the time it takes to receive claim payments to unsatisfactory offers or claim settlements.
Again, since Costco is not a true insurance company, they will not handle any insurance related questions, concerns, or needs once you sign up. You will rely on CONNECT customer service for support.
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CONNECT’s standard home insurance policy offers the same coverage options as other insurance companies, including:
Additional coverage options are available through CONNECT. If you want to protect your property beyond what is covered by your standard policy, some additional coverages you can purchase include:
CONNECT also offers additional policies to protect against perils not covered by standard policies, such as earthquake insurance. Your mortgage lender – and even local law – may require such a policy, or you may simply want to consider them for added protection. Many other insurance companies offer the same or similar policies and drivers.
Discount availability varies by country, and each discount has eligibility criteria. However, many other insurance companies offer their members the same or similar premium discounts.
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In addition to the standard coverage available, CONNECT offers several benefits at no additional cost to Costco members. These benefits include:
If you have a Costco Premium membership, you can also get home closing assistance and glass repair reimbursement up to $1,000 per year at no extra cost. There are no deductibles for claims using these benefits, but not all benefits are available in every state.
Costco is known for offering great deals, but there’s no guarantee that buying your home insurance from CONNECT through Costco will get you the best premiums.
I collected quotes on a home in Atlanta, Georgia from five different insurance companies and found that CONNECT’s quote was somewhere in the middle.
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To find out if Costco memberships offer CONNECT deals, you’ll need to do some comparison shopping yourself.
“The whole point of insurance isn’t necessarily to have the lowest premium, but to get the coverage you need if something goes wrong.”
When you’re comparison shopping, it’s important to consider the coverage offered by the quoted prices. A lower premium is not a good deal if the included coverage does not provide adequate protection for your assets.
Costco offers members great prices on many products and services, but there is no guarantee that this will be one of the best deals available.
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It’s always worth comparing the offers and quality of coverage from multiple companies to get the best price for your needs. We provide a guide to the best insurance companies so you can compare the best options.
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Storage in one place. But did you know you can also buy home insurance during your next shopping trip?
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If you’re a Costco card member, you can sign up for CONNECT home insurance, offered through a partnership with American Family Insurance. Switch to CONNECT for exclusive member benefits. That includes discounts (Costco says you’ll save about $587 in the first year) and extra benefits like glass repair allowances and home closing assistance.
All home insurance plans also come with standard US home insurance policy benefits, such as identity theft protection, stolen credit card and check fraud coverage, and “cold asset” protection (when a power outage damages your food, you’ll get money to store it back in Costco) !)
Plus, if you take advantage of the auto insurance that Costco also offers, you can qualify for a discount on multiple policies to make your monthly bill more affordable.
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Lending Tree review site Value Penguin said Costco calls home insurance a “terrible choice” for members and is more expensive than most other policies, at about $999 a year, which is more than the average cost of other policies. 6%. plan.
While the extra benefits are nice, the CONNECT plan has a longer claim processing time. For these reasons, Value Penguin only gives the CONNECT home insurance plan two stars out of five.
Part of the problem, they say, is that the carrier, American Family Insurance, has only 2,000 agents nationwide and no local agents, compared to State Farm’s roughly 19,000 agents, causing claims to be often delayed.
This old house gives Costco home insurance a good rating, with a score of 78.25 out of 100. Their biggest complaint is that CONNECT is only available in 44 states (excluding Michigan, North Dakota, Wyoming, Louisiana, Maine, and West Virginia) and that Costco doesn’t guarantees its own policies and customer service is not available 24/7.
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Although the site gives it high marks for its overall affordability (depending on many factors, such as where you live and what your home is made of), as well as some amenities such as fire protection in some areas, backup water coverage and water pump overflow and cover jewelry, art, and musical instruments.
Investopedia also thinks Costco CONNECT is a good option for members. They tout “no-claims discounts,” which offer reduced premiums if no claims are filed for five years, as well as discounts for installing home security systems and staying with the company for longer (long-term maintenance policies). However, due to the unavailability of services from the local agent, they also canceled the full score for the program.
Consumer advocacy website Clark.com is also lukewarm on the value of Costco home insurance policies, noting, “Costco offers its members great prices on many products and services, but there is no guarantee that this is one of the best deals.”
Collecting quotes for several homeowner situations in several states across the country, Clark.com found that policy prices are “in the middle of the pack.”
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While they also point out the special benefits of a Costco membership, such as protection against check fraud, food spoilage and identity theft, they point out that not all benefits come with a standard Costco membership. For some, you’ll need an executive membership, which is double the $120 annual fee. and
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