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Costco vs Lemonade: which is better for car insurance in 2026?

Q: Is Costco or Lemonade cheaper?

We cannot answer that with published data. Costco does not release public rate information, so no independent study — ours included — can put a national average next to Lemonade's Not published. The only way to know is to quote both.

Q: Which handles claims better, Costco or Lemonade?

Neither has a clear edge. Costco scores Not rated and Lemonade Not rated on the claims measure we use — close enough that the individual adjuster you draw matters more than the company average.

Q: Is Costco better than Lemonade overall?

We can't put two scores side by side here. Costco does not publish enough of the underlying data for us to give it an overall score — we would rather say so than compute one from the two or three figures that do exist. Lemonade scores undefined out of 5. Compare them on the individual categories above, and on the quotes you actually get.

Q: Can I switch from Costco to Lemonade mid-policy?

Yes. Auto policies can be cancelled at any time, and most insurers refund the unused premium pro-rata — though some charge a short-rate cancellation fee, so check your policy before you cancel. The one rule worth following: get the new policy bound and in force before you cancel the old one. Even a single day uninsured can count as a coverage lapse, which raises your rate at the next renewal and, in some states, exposes you to a registration penalty.

CostcoNot scored

LemonadeNot scored

Across our six scoring categories, Costco comes out ahead in 1, Lemonade in 0, with 5 too close to call. There is no overall score to compare, though: Costco does not publish enough of the underlying data to earn one, and we would rather leave it blank than build a number out of the two or three figures that happen to exist. Lemonade is the better-documented of the two, which is not the same as being the better insurer for you. Judge these two on the categories where both have real figures — and on what they actually quote you.

Costco vs Lemonade, side by side

Category

CostcoRead the full review

LemonadeRead the full review

Overall scoreWeighted across the six categories below

Not scored

PriceAverage annual full-coverage premium · 25% of score

Not published

This company does not release public rate data

Not published

This company does not release public rate data

Claims satisfactionJ.D. Power 2025 claims study, out of 1,000 · 20% of score

Not rated

Not ranked as its own brand in the J.D. Power 2025 claims study

Not rated

Below the sampling frame of the J.D. Power claims study, which covers only the largest insurers

Complaint recordComplaints relative to company size · 15% of score

2.5More than expected

Complaints relative to company size, NAIC data 2022–2024

Better

1.5Far more than expected

Complaints relative to company size, NAIC data 2022–2024

Financial strengthAM Best Financial Strength Rating · 10% of score

4.0A

AM Best Financial Strength Rating

Not published

No AM Best rating we could verify — see the review

DiscountsBreadth of published discounts · 15% of score

3.59 published

Discounts on the carrier's own pages · No branded telematics program found

Not published

No discount list we could read on the carrier's own site

Digital experienceApp ratings and self-service depth · 15% of score

Not published

No app-store presence we could verify

Not published

No app-store presence we could verify

Availability

40 states, members only

10 states

Best suited to

Costco Executive Members who value guaranteed renewal

low-mileage drivers already using Lemonade for renters or home

Sources: average premiums from NerdWallet's August 2026 rate analysis (Quadrant Information Services), for a 35-year-old driver with a clean record and good credit in a 2023 Toyota Camry LE at 12,000 miles a year, 100/300/50 limits with $1,000 deductibles — national average $2,356. Claims satisfaction from the J.D. Power 2025 U.S. Auto Claims Satisfaction Study (segment average 700). Complaint record from NerdWallet's analysis of NAIC complaint data, 2022–2024. Financial strength from AM Best. Discounts and app data from each carrier's published pages and the Apple App Store / Google Play, retrieved August 2026. Updated August 2026.

Costco vs Lemonade across all six categoriesScored 1–5. Longer is better in every category — the price bar already accounts for cheaper being better.

CostcoLemonade

Category by category

Price

Too close to call

Costco does not release public rate data, so there is no like-for-like premium to set against Lemonade's Not published. That is a real gap in the comparison, not a rounding error — treat Costco's price as unknown until you have a quote in hand.

Costco

No published premium. The rate study behind every other price on this site does not quote Costco separately, so the price category carries no score.

Lemonade

Lemonade is not included in the rate study behind every other premium in this review.

Claims satisfaction

Too close to call

Neither pulls ahead on claims satisfaction: Costco posts Not rated and Lemonade Not rated, a difference too small to choose on.

Costco

Costco is not a ranked brand in the J.D. Power 2025 claims study. American Family's 702 is measured on a different book of business and is not borrowed here.

Lemonade

Not in the J.D. Power claims study, which samples only the largest insurers.

Complaint record

Costco ahead

Costco takes complaint record on More than expected against Lemonade's Far more than expected.

Costco

More complaints than expected for its size, per NerdWallet's analysis of 2022–2024 NAIC data — a worse record than American Family's own brand.

Lemonade

Far more complaints than expected for its size.

Financial strength

Too close to call

Neither pulls ahead on financial strength: Costco posts A and Lemonade Not published, a difference too small to choose on.

Costco

AM Best A (Excellent), affirmed in September 2025 for all three companies that underwrite Costco auto policies.

Lemonade

No AM Best rating we could verify. Demotech affirmed an A' (A-prime) rating in June 2026 — a real assessment, but from a different agency on a different scale, so not comparable to the AM Best ratings shown elsewhere here.

Discounts

Too close to call

Neither pulls ahead on discounts: Costco posts 9 published and Lemonade Not published, a difference too small to choose on.

Costco

Nine published auto discounts, counting the member discount itself. No usage-based program is offered through Costco.

Lemonade

No discount list we could read on Lemonade's own site.

Digital experience

Too close to call

Neither pulls ahead on digital experience: Costco posts Not published and Lemonade Not published, a difference too small to choose on.

Costco

No app-store figures we could attribute to the program. Policies are serviced through American Family's account system, and we could not confirm which app Costco policyholders use.

Lemonade

No app-store figures we could verify from a primary source.

So which one?

Pick Costco if…

You are among costco executive members who value guaranteed renewal.
You want the lower complaint record — Costco sits at More than expected.
Availability fits: 40 states, members only.

Read the full Costco review →

Pick Lemonade if…

You are among low-mileage drivers already using lemonade for renters or home.
Availability fits: 10 states.

Read the full Lemonade review →

Costco vs Lemonade, answered

The questions people ask before switching between these two.

Is Costco or Lemonade cheaper?

Which handles claims better, Costco or Lemonade?

Is Costco better than Lemonade overall?

Can I switch from Costco to Lemonade mid-policy?

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