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).
The 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.
Unlike other insurance comparison websites, we're completely independent and don't get paid by any of the insurers we're comparing
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.
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 February 2025. A higher price score means the policy was cheaper, on average, in a sample of quotes collected in January 2025.
Bupa Basic, AHM Basic and Huddle Basic
- CHOICE Expert Rating: 45% (Bupa) 50% (AHM) 50% (Huddle)
- Price score: 51% (Bupa) 63% (AHM) 63% (Huddle)
- Cover score: 42% (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. A discount of 10 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
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 to 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: 46%
- Price score: 39%
- Cover score: 51%
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.
CGU Fundamentals
- CHOICE Expert Rating: 49%
- Price score: 62%
- Cover score: 41%
This policy received the lowest cover score in our review (41%), which means our experts weren't impressed with what it has to offer. And 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.
Despite the lack of features, it's not even cheap!
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.
RAA Home and Contents
- CHOICE Expert Rating: 50%
- Price score: 35%
- Cover score: 60%
CHOICE experts say that if you have this policy, you're paying too much for what is essentially average cover. It has a 10% underinsurance safety net for building and contents cover, which is a plus, but it's still lower than that offered by other insurers.
In terms of cover, RAA is in the middle of the pack. One upside is that they don't have long lists of cover exclusions or restrictions, but when they do apply a sublimit it tends to be on the low side. This would be acceptable if it weren't for the price, which is too high for cover of this quality.
Other downsides include no cover for any plants in the ground including lawns, trees, plants, shrubs or hedges, and low cover for contents you have outdoors in the open air. It also offers low cover for temporary accommodation, which you might need if your home is damaged or uninhabitable by an insured event.
It has a 10% underinsurance safety net for building and contents cover, which is a plus, but it's still lower than that offered by other insurers
You should also beware of taking cash settlements with this insurer, as CHOICE experts say you could find yourself out of pocket.
A cash settlement is when the insurer gives you money to carry out the repairs or organise replacement contents yourself, rather than letting the insurer organise the works.
If repairs or replacements are available, and you agree to a cash settlement instead, the amount offered will be what it costs RAA to fix the damage – but not necessarily what it will cost you to fix it yourself. Because of the deals insurers have with their networks of repairers, the prices available to them are often lower than market prices.
RAA doesn't want to pay full price for a cash settlement, so they reserve the right to offer the lowest price possible, even if this isn't a price you'd be able to access yourself.
Read the full RAA Home and Contents policy review.
Everyday Insurance Standard policy from Woolworths
- CHOICE Expert Rating: 50%
- Price score: 59%
- Cover score: 45%
Woolworths is fond of spruiking insurance to customers already buying groceries in their stores, offering lots of incentives and discounts via their Everyday Rewards loyalty programs.
However, even if it seems like you're getting a cheap deal or a few bonus points for signing up, CHOICE experts say you should be aware that this basic policy scores low for cover and in the middle for price. It also doesn't have an underinsurance safety net.
Another downside our experts note is that unlike many other policies, this one has no cover for any animal damage, which includes things like cover for leaks and fires caused by insects or damage by animals or birds getting caught in your home.
And while the $4000 limit for outdoor contents is not the very worst in the market, it compares poorly to policies that offer benefits as a percentage of your sum insured.
Without defining 'out of use' or 'stored away', this extremely broad wording gives the insurer leeway to say just about household item stored in a cupboard is 'out of use', allowing them to get out of replacing it new
This limit has also been the same for the last decade, with no increases due to inflation – so there's no allowance for the fact that replacing your items today would cost more than it did 10 years ago. This is why it's often better to go with a policy that gives sublimits as a percentage of your home sum insured, as your payout increases in line with the annual increases to your sum insured.
All the insurers in our home and contents insurance comparison cover your contents on a "new for old" basis. However, Everyday Insurance has a broad-sounding exclusion for clothing, shoes, linen or household items "out of use, such as those stored away in cupboards". For those items, the insurer will pay the market value based on their age and condition.
Without defining "out of use" or "stored away", this extremely broad wording gives the insurer leeway to say just about household item stored in a cupboard is "out of use", allowing them to get out of replacing it new. (This clause applies to other Hollard policies, including the Huddle/Bupa/AHM policies named elsewhere in this article).
Read the full Everyday Insurance Standard policy from Woolworths.
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Stock images: Getty, unless otherwise stated.
