Consumer group CHOICE has come out swinging against some big insurance industry names in a new report. The advocacy group has done a deep dive into more than 50 home insurance policies and rated each one individually.
Highlighting the four worst-rated home insurance policies in a statement yesterday, CHOICE named CGU, Bupa, AHM and Guild as culprits. The quartet were targeted for their high prices, lack of features, or both.
CGU took out the ‘wooden spoon’, with its ‘Fundamentals’ policy achieving a CHOICE Expert Rating of just 46 per cent. Faring barely any better were Bupa’s Basic policy, which rated 47 per cent and AHM Basic (49 per cent). The fourth-lowest scorer was Guild’s ‘Home Elite’ policy. Choice experts rated it at 52 per cent.
CHOICE insurance expert Daniel Graham said the policies suffered in the rankings as a result of several aspects of weakness. “The things that make these policies bad aren’t necessarily unique to these products,” he said. “But these are some of our lowest-scoring policies, which means they’ve fallen down at multiple points of the comparison.”
Where the home insurance policies fell down
With the lowest rating of 46 per cent, CGU Fundamentals’ lack of features was its biggest shortcoming, according to CHOICE. While it scored 53 per cent for price, it’s features score was a lowly 41 per cent. No other policy scored more poorly for features.
To be fair, the CGU policy was not the only one to score just 41 per cent. However, of those that did, it was the most expensive. CHOICE summed it up succinctly: “Despite the lack of features, it’s not even cheap!”
Better known for their health insurance, BUPA’s Basic home insurance policy did not impress the CHOICE experts. Like CGU, its features earned a score of just 41 per cent, but its price score was better at 57.
AHM’s Basic policy was another whose features scored just 41 per cent. However, of the three policies with the lowest features score, it scored best on price, with 61 per cent. As an aside, the home insurance policies of both BUPA and AHM are provided by the Hollard insurance group.
Coming in fourth-last place in CHOICE’s ratings was Guild’s ‘Home Elite’ policy. With a score of 69 per cent, it easily outperformed the other bottom four policies when it came to features. But it fell down badly on price, scoring just 25 per cent. That dragged its overall rating down to 52 per cent. Mr Graham described it as “a policy that looks good on paper but has priced itself out of contention”.
Lessons to be learnt
Mr Graham said the CHOICE ratings were a reminder not to accept any one insurer’s advice on cost at value. Earlier this week YourLifeChoices suggested a yearly review of health insurance coverage and costs could be a good idea. Mr Graham said the same applies to home insurance.
“No matter which insurer you are currently with, if you haven’t switched for a while, you’re likely missing out on savings,” he said.
Do you have home insurance? When was the last time you compared your policy to others? Let us know via the comments section below.
Also read: Private health insurance premiums predicted to rise after claims increase
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So who were the top 4???