- There’s an online quote tool.
- Coverage is available for most US states.
- Certain requirements must be met.
- A little on the expensive side.
- Terrible ratings for customer service.
For quite a while, Costco members have reveled in the perks of saving big bucks on groceries, household essentials, and a host of other items. However, unbeknownst to many of these members, Costco offers more than just a wide variety of savings at the store. There is also a vast selection of insurance policies up for grabs.
Initially, Costco struck up a partnership with Ameriprise Financial to take care of the underwriting for their insurance policies. Recently, Ameriprise Financial was acquired by American Family Insurance (Amfam), which has now assumed the responsibility of underwriting all policies offered by Costco. The insurance products under Ameriprise are now called Costco CONNECT, powered by American Family.
Costco CONNECT offers various insurance products, each tailored to provide you with extensive coverage to meet your specific needs. These programs afford you a range of options, including an array of protective measures that safeguard you against unforeseen events.
Whether you need medical, car, or homeowners insurance, Costco CONNECT offers comprehensive packages that guarantee you peace of mind. How well do their home insurance policies provide that quality Costco experience, though?
Keep reading to see our review of Ameriprise homeowners insurance for Costco members. We’ll get into what you can expect from a standard policy. Plus, we’ll get down to the nitty-gritty of how their customers feel Ameriprise measures up to their expectations.
Costco CONNECT homeowners insurance coverages and premiums
We love online quote tools and we love simplicity. Amfam’s CONNECT home insurance quote is easy to retrieve and gave us all the details we needed to proceed with a purchase online.
What we love about AMfam’s CONNECT online quote tool is how thorough it is. We’re used to insurance companies going for simplicity, asking only the necessary questions, and then moving on to please the customer. Contrarily, Amfam’s CONNECT wanted all the deets.
We plugged in an address we used recently in another home insurance review. This is a 1,220-square-foot, $140,000 home in the middle of central Arkansas, where home insurance rates can be pretty expensive.
We were asked about the home’s frame and the type of roof, which are common questions. Then we were asked about our attached structures, prompting us to count how many balconies, decks, or porches we had. For the first time, we were asked if we’d be keeping dogs on the property.
Finally, we had to ensure that the home was our primary, non-manufactured home without unrepaired damage. We also needed to confirm that we did not house any dangerous dog breeds, livestock, exotic animals, an oil tank, or a business.
Once it was all said and done, we finally got our quote. For $3,171.60 a year, we were offered:
- $348,300 in dwelling coverage
- 10% other structures coverage ($34,830)
- 75% personal property coverage ($261,225)
- 20% loss of use coverage ($69,660)
- $300,000 in personal liability
- With the ability to change to $100,000 or $500,000
- $5,000 in medical expense coverage
- With the ability to change to $2,000, $3,000, or $4,000
- Personal injury coverage
- A standard $1,000 deductible
- A standard $1,000 wind and hail deductible
We were also presented with these optional coverages:
- Water backup and sump pump overflow: coverage pays for losses resulting from water backing up through sewers and drains or an overflowing sump pump.
- Earthquake: provides coverage for damage to your home and property caused by an earthquake, volcanic eruption, or aftershocks.
- Home media equipment endorsement: provides extra coverage for items like personal computers, MP3 players, CD players, etc.
- Adventure equipment endorsement: a unique endorsement that provides extra protection for golfing, skiing and boarding, biking, or fishing equipment.
- Scheduled personal property: allows you to add coverage for specified items, like fine art, musical instruments, jewelry, and firearms.
As we mentioned earlier, we used this same address in a quote tool before. With Amfam’s CONNECT, we were provided with more dwelling coverage and a $1,096 more expensive premium to compensate.
The average yearly home insurance premium in the state of Arkansas for $350,000 in dwelling coverage costs around $2,150. Amfam’s CONNECT costs us nearly $1,000 more. This would be for the same coverage, plus a few interesting endorsements and minus a few average ones.
We noticed we didn’t have an option for flood or service line coverage, which are common endorsements for this area in the US.
Checking online reviews from homeowners insured with Costco CONNECT, we found that their premiums are generally more expensive than the competition, with one customer stating that Costco homeowner rates are “generally 35% greater than other reputable companies.”
Costco CONNECT home insurance discounts
Thanks to their comprehensive pricing tool, Amfam’s CONNECT can apply applicable discounts to our quote. According to the home’s location and circumstances, the following discounts were applied:
- Claims Free: we get a discount for being claims-free in the last 5 years
- Smoke Alarms: we get a discount for having smoke alarms in the home connected to video doorbells
- Deadbolt Locks: we get this discount for paving deadbolt locks on all our exterior doors.
- Roof Renovation: we get a discount for having recently replaced our roof
- Full Pay: we get a cheaper rate for paying in full as opposed to in installments
Unfortunately, we aren’t able to tell just how much these discounts saved us in the long run. Considering our quote with another company was cheaper with fewer discounts speaks volumes.
Other discounts provided to certain CONNECT homeowners include:
- Age of home: receive a discount for buying or building a new home
- Multi-product: receive a discount for bundling any other policy purchased through CONNECT
- Other renovation discounts: just like our roof replacement discount, there are other discounts you can receive for renovation projects. You can receive a discount for having repaired or replaced certain areas of your home by a licensed contractor in the last 9 years:
- Your entire electric system
- Both heating and cooling systems
- Your entire plumbing system
Costco homeowners insurance claims
To file a claim with CONNECT, you can either log in to your account online or call them at any time at 1-800-872-5246.
When we look for customer reviews of CONNECT home insurance, we find out the truth. Some customers recall an “overall positive” experience, plus a claims process that didn’t inevitably raise their premiums. Many others have been waiting for several months to a year for their claim to be paid out.
Unsurprisingly, most of CONNECT’s complaints noted by the NAIC in 2022 were due to claims handling. For the most part, delays and unsatisfactory settlements take the cake with over half of the reasoning for these complaints. Denial of claims is another type of complaint hovering just below that.
Costco home insurance customer reviews
Some opinionated customers believe that Ameriprise was a better company than American Family. As a result, many of the reviews geared toward Amfam’s CONNECT recall how service and claims were better before the merger.
Their most recent review on the BBB site expresses how much they notice the stark difference in customer service and policy rates. Many feel duped by the friendly Costco sponsorship, saying their home insurance experience is anything but honest.
Aside from your typically terrible claims experience, many Amfam CONNECT customers have simply been dropped without notice. Others recall flat-out rude, incompetent, or otherwise negative customer service.
Costco CONNECT financial strength
Other astute businesses don’t share the same outwardly negative views of Amfam’s CONNECT as its customers. Contrarily, the BBB has rated them with an A+ as an accredited business since 2021.
AM Best has provided Amfam’s CONNECT with an A (Excellent) for financial strengths, and an A+ as a long-term issuer credit. They’ve kept these scores steady over the last 5 years, at least.
Weiss Ratings has provided their least favorable score, with a C+ for insurance safety. This indicates the belief that they are in the upper third of businesses with fair financial security in a currently stable state.
It’s still believed that Amfam’s CONNECT insurance product may encounter difficulties in maintaining financial stability in the case of an economic downturn.
Final thoughts
Overall, Costco’s CONNECT powered by American Family is a possible contender for home insurance. They provide full coverage with the ability to update and change certain limits and add-ons. A couple of discounts can be applied depending on your area, but don’t count on them for a competitively low premium.
So many American Family customers are more appreciative of their previous service with Ameriprise. They recall how much easier it was to receive support and have claims approved. Nowadays, homeowners are being dropped for not meeting certain requirements – often with short notice, if any at all.
Nevertheless, their financial standing in the insurance industry seems to be fair. They’re rated highly by some, and average by others.
Our overall disposition is, if you’re looking for that comforting Costco feeling, you might not find it in their insurance products. You’ll get decent coverage for a higher price, though, if that’s what you’re into.
