How does Costco auto insurance stack up against State Farm's policies?
Established in 1922, State Farm is an institution in the insurance industry. The company offers policies across the US, claiming to insure “one in five vehicles” on the road. Less well-known are Costco's car insurance offerings. Costco members can purchase Ameriprise insurance policies through the wholesaler — for a hefty discount. Despite its perks, Costco auto insurance comes with some customer service caveats worth considering. Let's take a look at the primary differences between Costco and State Farm car insurance products.
*Find out more about Costco car insurance.
To compare State Farm' and Costco's rates, we used a methodology — outlined here — that compared pricing for a single driver with matching coverage levels and driving history. Given this "typical" driving profile, Ameriprise is cheaper than State Farm.
Car Insurance Provider
Average 6-Month Premium
Costco Car Insurance
On average, State Farm costs $206 more for a six-month policy than Ameriprise — or about 39%. On a monthly basis, Ameriprise is $34 cheaper than State Farm.
At a basic coverage level, State Farm and Ameriprise provide the same protections. Liability, collision, comprehensive, and any state-specific requirements are consistent from insurer to insurer. However, some of the under-the-hood details differ. Let’s explore.
This feature is only available to Costco Executive Cardholders. It gives these members the added cushion of automatic policy renewal, even in the case of multiple accidents. Many companies will non-renew or cancel a driver's policy after three accidents in a certain period of time. While State Farm does not specifically state its policy cancellation threshold, the insurer may drop coverage after several violations, depending on their severity.
Restrictions to Costco's lifetime renewability perk:
Usage-based insurance is growing in popularity. To administer these policies, insurance companies use telematics devices to assess clients' driving habits, pricing policies accordingly. The safer your driving, the less you will pay for car insurance.
Costco — via Ameriprise — does not offer a telematics program. However, State Farm does. State Farm's Drive Safe & Save Program uses OnStar or a mobile app to measure speed, time of day, braking, and acceleration to price your premium. While rates will vary based on your individual results, State Farm advertises savings of up to 50% through Drive Safe & Save.
Learn more about usage-based insurance and telematics.
While Costco has stores across the US, Ameriprise operates only in 34 states. Below are the states in which Ameriprise does not sell coverage.
State Farm offers car insurance in all US states and has no membership requirements.
If you need to contact an insurance company, it’s usually because something bad happened. Decent customer service is imperative. State Farm has more favorable customer service, JD Power, and Financial Strength ratings than Costco (Ameriprise). Ameriprise’s unofficial reviews also highlight some concerning trends. General themes show difficult claims payouts and unexpected rate increases.
Do your research. Start with the quoting process to see which companies will give you the cheapest rate and then begin with their customer service reviews. Enter your ZIP code below to get started.
These rates were determined using five ZIP codes from representative areas across the US. We elected the same coverage level for each quote to get comparable rates.
Learn more about our methodology.