When you pop down to the supermarket for milk and bread and a few things for dinner, do you also look out for the best insurance deal?
The large supermarket chains offer insurance as part of their suite of products, but are they worth it? Often they sweeten the deal with discounts and savings, but they can be some of the more expensive products on the market unless you do your homework.
I first heard of supermarkets considering this move more than 20 years ago at a trade event. Back then, Australian supermarkets were exploring becoming one-stop shops with pharmacies and optometrists onsite. Despite a few toes being dipped in, neither of those two things caught on. Big W tried it for a while, but found recruiting suitable staff onerous. While there were plenty of people looking for entry-level work in a supermarket or department store, very few highly trained health staff were willing to work there. Add to this the cost of establishing the specialised fittings and fixtures, and none of it added up and they were gone before you probably even noticed they were there.
However, with insurance, there’s no need for an instore physical presence, which reduces the costs considerably.
Established products
Coles, Woolworths and Costco have offered insurance for a while, and Aldi joined in earlier this year. IGA has a different business model – shops are owned by individual owners – that would find it difficult to translate across all members.
Supermarket insurance often comes with member discounts, especially if linked to their loyalty programs, and in the case of Costco, gift cards, but are they worth it? Aldi, being very Aldi-like, has neither a loyalty program nor significant discounts, but that’s to be expected.
Well, like anything, do your homework and weigh up your options.
If you are the private type, it should be noted that you will have to hand over a lot of private data, but that’s the same with any insurance product. It’s whether you trust your supermarket to protect that data or not. Coles had a data breach in 2023 and Woolworths in 2022. Costco’s brush with the issue was confined to its overseas stores. Not a great start if you are considering these products, but there are very few large Australian corporations that haven’t been touched by data breaches of some sort.
Discount or not to discount
A great deal of the appeal of supermarket insurance is that it comes with considerable discount privileges.
Woolworths offers 10 per cent off one shop each month and Coles offers $50 on one shop plus limited deals for double rewards points. Costco offers discounts and gift cards, depending on the type of insurance, with extra rewards for executive members. Aldi simply claims it is ‘competitive’.
Which all sounds great, but great discounts do not mean great insurance policies. If you are considering going with a supermarket insurance product, read the fine print carefully and weigh up your options. Does it cover everything you need and expect? Here’s where doing your homework comes in. Insurance policies are known for being tricky to navigate, so take your time and make sure you are covered where you need it.
The good news is, supermarket insurance isn’t actually provided by the supermarkets. They didn’t just let Craig from accounts have a crack at coming up with a few ideas in his spare time. They are offering a product underwritten by established insurance companies, so another shopfront if you like, for insurance groups such as Budget Direct (Coles), Hollard (Woolworths) and RACQ (Aldi).
CHOICE rules
Consumer group CHOICE has done a lot of the hard work for you and found as a basic product, many of these supermarket insurance offerings just don’t add up.
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, but 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.”
If you are considering supermarket insurance and are unsure about going ahead, one strategy may be to confirm a quote and then visit a comparison site to see if it stands up against other products.
Have you bought insurance through a supermarket? Was it worth it? Why not share your experience in the comments section below?
Also read: Why your insurance premiums are skyrocketing
