Costco vs. State Farm Auto Insurance: Which is Better?

How does Costco auto insurance stack up against State Farm's policies?

Costco auto insurance vs. State Farm

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.

What we'll cover:

  1. Which company is the cheapest?
  2. Do both companies provide the same coverage?
  3. Availability
  4. Customer service reviews

 


 

State Farm vs. Costco: car insurance rate comparison

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

State Farm

$740

Costco Car Insurance

$534

 

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.

 


 

Coverage options

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.

 

Lifetime renewability

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:

  • If you live in Maryland or Michigan
  • Have “major violations”
  • Fail to pay your premium
  • Fail to provide requested documentation
  • Move to a state Ameriprise does not sell in
  • Purchase an uninsurable vehicle

 

Telematics

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.

 


 

State Farm vs Costco car insurance: where is coverage available?

While Costco has stores across the US, Ameriprise operates only in 34 states. Below are the states in which Ameriprise does not sell coverage.

Alaska, California, Connecticut, Florida, Hawaii, Idaho, Louisiana, Maine, New Hampshire, North Carolina, North Dakota, Rhode Island, Tennessee, Washington, and Wyoming.

State Farm offers car insurance in all US states and has no membership requirements.

 


 

State Farm vs. Costco car insurance: which has the best customer service?

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.




Find a great policy today!

 

Additional resources

 

 

Methodology

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.

  • Austin, TX — 78751
  • Columbus, OH — 43235
  • Glenwood, IL — 60425
  • Woodstown, NJ — 08098
  • Mcintosh, NM — 56556

Learn more about our methodology.