State Farm vs Costco Car Insurance: Which is Better for You?

How does Costco's auto insurance policy stack up against State Farm's?
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Ava Lynch

Insurance Analyst

  • 7+ years of Experience in the Insurance Industry

Ava joined The Zebra as a writer and licensed insurance agent in 2016. She now works as a senior insurance contributor, providing insights and data a…

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Renata Balasco

Senior Content Strategist

  • Licensed Insurance Agent — Property and Casualty

Renata joined The Zebra in 2020 as a Customer Experience Agent. Since 2021, she has worked as licensed insurance professional and content strategist.…

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 CONNECT, powered by American Family 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. 

*If you're only looking for information related to Costco's offering, see our Costco car insurance guide.

State Farm vs. Costco: car insurance rate comparison

To compare State Farm's and Costco's rates, we compared pricing for a single driver with matching coverage levels and driving history (methodology here). Given this "typical" driving profile, CONNECT is cheaper than State Farm.

Car Insurance Provider Average Annual Premium
State Farm $1,480
Costco Car Insurance $1,068

On average, State Farm costs $206 more for a six-month policy than does CONNECT — or about 39%. On a monthly basis, Costco's CONNECT insurance is $34 cheaper than State Farm.

The Zebra’s auto insurance data methodology

The Zebra’s Dynamic Insurance Rating Tool for home and auto insurance rates utilizes the latest ZIP code-level rate filings from across the U.S., sourced from Quadrant Information Services and S&P Global. These filings, typically updated annually or biennially by insurers, are verified through Quadrant’s QA process and then integrated into The Zebra’s estimator.

The displayed rates are based on a dynamic home and auto profile designed to reflect the content of the page. This profile is tailored to match specific factors such as age, location, and coverage level, which are adjusted based on the page content to show how these variables can impact premiums.

For a comprehensive understanding, see our detailed methodology.

Coverage comparison: Costco vs. State Farm

At a basic coverage level, State Farm and Costco 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...

  • reside in Maryland or Michigan
  • have “major violations”
  • fail to pay your premium
  • fail to provide requested documentation
  • move to a state outside of CONNECT's coverage territory
  • purchase an uninsurable vehicle


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 CONNECT, powered by American Family Insurance — 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.

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

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

AlaskaCaliforniaConnecticutFloridaHawaiiIdahoLouisianaMaineNew HampshireNorth CarolinaNorth DakotaRhode IslandTennesseeWashington, and Wyoming.

State Farm offers car insurance in all U.S. 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 (CONNECT). CONNECT, powered by American Family Insurance's unofficial reviews 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.

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About The Zebra

The Zebra is not an insurance company. We publish data-backed, expert-reviewed resources to help consumers make more informed insurance decisions.

  • The Zebra’s insurance content is written and reviewed for accuracy by licensed insurance agents.
  • The Zebra’s insurance editorial content is not subject to review or alteration by insurance companies or partners.
  • The Zebra’s editorial team operates independently of the company’s partnerships and commercialization interests, publishing unbiased information for consumer benefit.
  • The auto insurance rates published on The Zebra’s pages are based on a comprehensive analysis of car insurance pricing data, evaluating more than 83 million insurance rates from across the United States.