As the cost of living continues to bite, high insurance premiums are hitting Australians particularly hard.
Unfortunately, home and contents insurance is not one of those things you can simply strike from your household budget – it's wise to ensure your assets are covered in the event of minor or major disasters.
But, it's also wise to ensure you're getting the best deal.
It's vital you have a good-value policy you can rely on (and not one that has sneaky exclusions, lacks basic features or is overpriced)
And as you're forking out hundreds or thousands of dollars each year for cover in the case of things like fire, flood or theft, it's vital you have a good-value policy you can rely on (and not one that has sneaky exclusions, lacks basic features or is overpriced).
Eight home and contents insurance policies to avoid
CHOICE experts have compared more than 60 home insurance policies across the market to help you find the one that best suits your needs and budget. We score each policy by balancing the cost with the features it offers, including cover limits and exclusions.
Unlike other insurance comparison websites, we're completely independent and don't get paid by any of the insurers we're comparing.
That means we're also willing to call out the policies that we don't recommend because they don't offer good value or have weird exclusions.
We don't want you to end up with a dud policy, so here are the products that were amongst the lowest scoring in our review, and which CHOICE experts say you should be wary of.
Unlike other insurance comparison websites, we're completely independent and don't get paid by any of the insurers we're comparing
CHOICE insurance expert Daniel Graham says: "The things that make these policies bad aren't necessarily unique to these products, but these are some of our lowest-scoring policies, which means they've fallen down at multiple points of the comparison.
"We consider a huge breadth of features, so it's rare that we can point to a single point of failure: some policies are holistically bad value."
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The scores below are for our combined home and contents insurance comparison published in November 2024. A higher price score means the policy was cheaper, on average, in a sample of quotes collected in October 2024.
CGU Fundamentals
- CHOICE Expert Rating: 45%
- Price score: 53%
- Cover score: 40%
This policy not only received the lowest CHOICE Expert Rating in our review, but it's also been given the equal-lowest features score (sharing the honour with the policies below), which means our experts weren't impressed with what it has to offer. And despite the lack of features, it's not even cheap!
Despite the lack of features, it's not even cheap!
To get the data we need for the features score, we developed a product feature questionnaire that covers everything from whether the policy includes cover for flood, to how much a barbecue would be covered for if it got stolen from your deck.
And when the results came back for this policy, we found it lacks most of the features that are standard in other policies, such as cover for motor burnout for appliances and food spoilage (for fridge/freezers), and no options for accidental damage or portable contents cover.
The strangest feature of this policy is that it doesn't actually cover you for "theft". We put that in quote marks because while you are covered for "burglary and break-in", "theft" as a distinct insured event is missing from the Product Disclosure Statement (PDS), which is the document that details what you are covered for.
In fact, the PDS specifies that you'll only be covered if there is "actual forcible and violent entry to your buildings" or theft "following the threat of immediate violence or violent intimidation".
When the results came back for this policy, we found it lacks most of the features that are standard in other policies
CHOICE experts warn that this means you may not be able to claim for general theft of your property if you can't show evidence of this "forcible and violent entry" or that it happened as the result of violence or intimidation.
This is bad news if a thief manages to slip through an unlocked door or unsecured window, or if they're good at covering their tracks.
Read the full CGU Fundamentals policy review.
Bupa Basic, AHM Basic and Huddle Basic
- CHOICE Expert Rating: 46% (Bupa) 51% (AHM) 51% (Huddle)
- Price score: 55% (Bupa) 66% (AHM) 66% (Huddle)
- Cover score: 41% (all three)
While the country's two biggest health funds, Bupa and AHM, may be keen to differentiate their health insurance offerings, they don't seem too bothered about standing out when it comes to home insurance.
"It's very common for well-known brands to partner with an existing insurer and slap their logo on a product without doing anything really innovative or different with it," says Graham.
In this case, Bupa and AHM have partnered with Huddle Insurance (underwritten by Hollard) to distribute policies that are nearly clones of one another – their respective product disclosure statements contain almost identical wording.
"Unfortunately these bottom-shelf policies don't have much to recommend them. At the moment they're failing to cut through on price while their cover leaves something to be desired."
Bupa and AHM's parent company, Medibank, do both offer their health insurance customers a discount on home and contents insurance. Ten to 20% off your home insurance might sound like a good deal, but if you also end up with one of the most expensive health insurance policies in the country you might not be coming out ahead.
Underinsurance protection is a very useful feature available in some home insurance policies
Daniel Graham, CHOICE insurance expert
Like the CGU policy above, these products are also missing an underinsurance safety net, where the insurer pays out a certain percentage extra if you have a 'total loss' and it's discovered that your home has been underinsured.
"Underinsurance protection is a very useful feature available in some home insurance policies," says Graham.
"Labour and parts costs can skyrocket after a natural disaster, meaning your sum insured might no longer meet the actual replacement cost of your home. If your policy has a safety net, the insurer will cover an additional 10–30% of your sum insured.
"For a building insured for $500,000 you might get an extra $100,000 for unexpected rebuilding costs. This kind of protection is important to prevent yourself from being out of pocket after a total loss."Read the full reviews for each of these policies in our home and contents insurance review.
Bupa Comprehensive
- CHOICE Expert Rating: 49%
- Price score: 47%
- Cover score: 50%
This policy is quite similar to Bupa Basic. It comes with accidental damage cover and higher sublimits but there's otherwise not much to differentiate them. Unfortunately, some elevated benefits aren't enough to make this policy competitive, so it also scores below the average in our cover score.
As with the Basic tier, Huddle and AHM offer an identical Comprehensive policy. However, those policies managed to avoid inclusion in this list of duds by being slightly more affordable.
Read the full Bupa Comprehensive home and contents insurance review.
People's Choice Listed Events and People's Choice Accidental Damage
- CHOICE Expert Rating: 51%
- Price score: 39% (People's Choice Listed Events), 26% (People's Choice Accidental Damage)
- Cover score: 58% (People's Choice Listed Events), 68% (People's Choice Accidental Damage)
Once again, these policies are identical to others on the market. People's Choice is a credit union that is selling re-branded versions of CGU's middle- and top-tier policies.
It's not clear what advantage you get from choosing the credit union over the original product, since the policy documents are essentially identical. People's Choice does pocket a commission for organising the sale, which might explain why their quotes are on average about 6% higher than the equivalent CGU policies.
Unlike the CGU Fundamentals policy above, these don't have the same problematic cover for theft, but both policies are weak when it comes to sublimits, and neither is strong on price.
Some negative points about these policies to note:
- No underinsurance safety net
- Limited detail on fire cover: covers loss and damage as a result of a fire, but the PDS is silent on other fire-related damage like smoke, soot or scorching.
- Listed Events only: cover for animal damage is limited to impact damage. No cover for damage caused by animals kept at the address or (for both policies) insects/rats/mice. No cover for damage caused by animals/birds chewing, clawing, eating or pecking. These are all somewhat common exclusions on their own, but taken together you wind up with minimal cover compared to other products.
- Not great cover for moving house: 14 days overlapping cover (where your contents are covered at the old and new addresses) is comparatively low, as is the $10,000 limit on contents in transit to your new house.
Accidental damage policies typically have broader cover than other policies, since many types of loss can fall under the umbrella of "accident". They still come with extensive lists of general exclusions and, as expected, are some of the pricier policies on the market.
Even so, People's Choice Accidental Damage has some fairly basic benefits that pull its cover score down.
Here are some examples:
- It only gives you 12 months cover for temporary accommodation, compared to 18 or 24 months from some other premium products.
- It only gives you $1500 cover for damaged/stolen trees, plants and shrubs (but no cover for water-related damage like storm or flood). This compares to the $5000 offered from the policy we found best for this feature, Huddle Black.
Read the full People's Choice Accidental Damage and Listed Events insurance reviews.
Guild Home Elite
- CHOICE Expert Rating: 51%
- Price score: 27%
- Cover score: 69%
"This is an example of a policy that looks good on paper but has priced itself out of contention," says Graham.
With a 68% cover score, it's a strong performer when it comes to features and benefits – including a 20% underinsurance safety net – but it's significantly more expensive than comparable "premium cover" policies. With almost the worst price score in our review, it just doesn't offer good value for money.
In an October 2024 price comparison containing over 5000 hypothetical customer profiles, this product was the most expensive in about a third of scenarios where Guild provided a quote. In a few cases, their quote was more than ten times the cheapest quote available.
This is an example of a policy that looks good on paper but has priced itself out of contention
Daniel Graham, CHOICE insurance expert
"The cost of this policy is a good reminder that you can't take at face value what any one insurer says about the cost to insure your property," says Graham. "There's always a real chance you're being overquoted, so it's always worth shopping around."
"No matter which insurer you are currently with, if you haven't switched for a while, you're likely missing out on savings.
"If you're willing to put in the effort you could theoretically change your insurer every year or so to take advantage of discounts available to new customers. But this only pays off if you make sure you're switching to a good-value policy every time."
Read the full Guild Home Elite insurance review.
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Stock images: Getty, unless otherwise stated.
