Need to know
- All of the major supermarkets offer home insurance. In the case of Woolworths and Coles, these policies are linked to their loyalty programs
- CHOICE experts say that, rather than just focusing on price, it's important to scrutinise the detail of policies to ensure you get the coverage you need
- CHOICE's independent home insurance review compares more than 60 home insurance policies across the market to help you find the one that best suits your needs and budget
Supermarkets are competing with each other for more than just your grocery spend. While Coles and Woolworths have been offering insurance products for years, Aldi debuted its insurance offering in June this year, giving its customers the opportunity to pick up their home and contents insurance, landlord insurance and car insurance along with their weekly shop.
But is it a good idea to buy your insurance from the same place you get your milk and bread?
There are certainly lots of incentives that the big supermarkets dangle in front of you to get your business. Coles and Woolies offer a range of insurance policies linked to their loyalty programs, Everyday Rewards and Flybuys, which give you bonus points when you sign up and ongoing discounts on your shopping that can increase according to how many policies you hold.
Of course, in order to take advantage of these discounts, you hand over a significant amount of personal data to the supermarkets, something CHOICE experts warn you should be wary of).
Short-term savings on your groceries are great, but insufficient insurance coverage or tricky caps or exclusions could leave you substantially out of pocket
Aldi doesn't have a loyalty program and doesn't offer conditional discounts – their insurance products were launched promising "everyday competitive prices for Australian shoppers".
With many Australians struggling with the increasing cost of living, a discount on groceries is undoubtedly a huge incentive. But CHOICE experts advise that while price is a key concern for many when shopping for a new insurance policy, you should also be considering the finer details of a policy and understand what you actually will, or won't, be covered for.
Short-term savings on your groceries are great, but insufficient insurance coverage or tricky caps or exclusions could leave you substantially out of pocket if you ever need to make a claim.
How can supermarkets offer insurance products?
The general insurance industry in Australia is worth almost $100 billion, so it's unsurprising that the major supermarkets want to get a slice of that pie.
However, supermarkets are obviously not financial service providers, insurance companies or experts, so they essentially act as an insurance promoter, leveraging their brand and their existing customers to sell another company's insurance which they then collect commission for.
Coles home insurance products are provided by Auto & General, which sells insurance under the more familiar Budget Direct brand, while Hollard issues home insurance for Woolworths' Everyday Insurance brand. Aldi insurance is underwritten by RACQ insurance through an agreement with Honey Insurance.
How do the Coles, Woolworths and Aldi home insurance policies stack up?
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.
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.
CHOICE insurance expert, Daniel Graham, has closely scrutinised each of the home insurance policies offered by Coles, Woolworths and Aldi.
"These are all fairly standard policies – what stands out about them is that none of them are unique," he says.
"Aldi are the king of copycat snacks and when it comes to their insurance products, all three supermarkets have simply repackaged someone else's existing policy and slapped their logo on it.
"When you look at what the supermarkets are putting forward as their point of difference you get the sense they're struggling to stand out in a market where unique selling points are mostly buried deep in the detail.
"Remember, almost all home insurance policies cover you for the same dozen or so insured events, so it's in sublimits and exclusions that a product can shine – or not. For the most part, these policies do not.
"That's why it's important to look at the detailed Product Disclosure Statement of the policy you're buying."
Just like with groceries, shopping around for your insurance can land you some pretty significant insurance savings. And just like supermarkets, there isn't as much variety out there as you might think.
If you think any of these policies gives you the cover you need, it's worth getting quotes from other brands with similar or identical policies to see if you can get it cheaper (without the need to commit to shopping at one supermarket forevermore to gain your loyalty points or get your discount).
And of course, use CHOICE's home insurance comparison to see how the supermarket brands stack up against the rest.
Coles, Woolworths and Aldi home insurance policies compared
Aldi Household Insurance
CHOICE feature rating: 57%
Sum insured policy underwritten by RACQ
Aldi's big hook is the 8% discount they offer to home insurance customers for putting web-connected monitoring devices in their homes, to detect things like leaks and doors left open.
This is not actually an Aldi special, but instead comes straight from Honey Insurance, which manages their policies. The discount, along with the insurance policy itself, is also available through other brands including Honey and BOQ. While many aspects of the Aldi policy are standard, there are a few points of difference CHOICE experts have noted:
- policy offers up to $1500 for stolen credit/ATM card fraud (per card)
- offers storm surge cover which is a rare inclusion but could be valuable for coastal properties
- above average limits for food spoilage (up to $1000)
- no overseas cover for portable contents (except New Zealand)
- no cover for vet bills. Vet bills are not covered by any of the supermarket home insurance policies but are covered by other policies in our comparison.
Coles Home Insurance
CHOICE feature rating: 60%
Sum insured policy with optional 25% building safety net. Provided by A&G.
As we highlighted earlier, for both the Coles and Woolworths policies, the unique selling point isn't actually in the insurance product: it's in the fact that you get discounts on your shopping or additional points in exchange for handing over your personal data to their respective loyalty programs. Remember there are many other policies that offer the same cover or better out there, so it's still important to shop around to make sure you're getting the best deal.
The Coles policy is the only supermarket policy with an optional 25% building safety net if you find yourself underinsured if you have to repair or rebuild your home.
A few other notable points in the fine print:
- includes no coverage for gardens and landscaping, which is an unusual exclusion
- good cover for the emergency storage of undamaged contents (If you can't live in your home due to damage from an insured event)
- international cover for portable contents
- temporary accommodation cover includes $250 to cover emergency groceries
- very good cover for 'cover for contents in the open air' (ie if you leave your possessions outside and they get damaged or stolen), however there is a cap at $1000 for theft. Exclusions apply
- no cover for vet bills. Vet bills are not covered by any of the supermarket home insurance policies but are covered by other policies in our comparison.
Woolworths Everyday Home Insurance
Everyday Standard Home Insurance
CHOICE feature rating: 45%
Woolworths Everyday Comprehensive Home Insurance
CHOICE feature rating: 56%
Woolworths offers two tiers of its home insurance product at different price points. As we have pricing data available for each of these policies, we're able to compare how they stack up on both features and price, and it's not great news.
Daniel says: "The Woolworths Standard Home Insurance policy received a price score of 62% – the higher the score, the cheaper the policy usually is compared to other products. There are many policies in our review that outperform both of these on both cost and level of cover."
"And there are identical products offered by providers such as Real Insurance and Australian Seniors, so it's worth shopping around to ensure you're getting the best deal."
A few details to note in these policies:
- no safety net for either if you find yourself underinsured
- accidental damage, such as to carpets, furniture, kitchen appliances, TVs etc is only covered by the Comprehensive policy (accidental damage is included as an optional extra in the Aldi and Coles policies)
- good cover in both policies for emergency storage of undamaged contents
- cover for contents when moving to a new home not covered by Standard policy
- no cover for vet bills in either policy. Vet bills are not covered by any of the supermarket home insurance policies but are covered by other policies in our comparison.
Find out more about the features of the Woolworths policy and how they compare.
Brands that offer similar home insurance products
If you think any of these supermarket policies give you the cover you need, it's worth getting quotes from other brands with similar or identical policies to see if you can get it cheaper (and without having to join a supermarket loyalty program).
Woolies Everyday Insurance: compare with Real Insurance, Australian Seniors
Coles*: compare with Budget Direct, Virgin Money, ING, Qantas
Aldi: compare with Honey, BOQ
*Coles has a $250 benefit for groceries built into their temporary accommodation benefit, which the other brands do not. In all other ways the cover is identical.
Stock images: Getty, unless otherwise stated.
