SOME car insurers are charging customers hefty fees for basic administrative alterations to policies such as changing their names or addresses, an investigation has revealed.
A report from Which? found that some companies are slapping charges of as much as £35 on customers who move house and need to change their address – or get married and want to put their new name on the policy. Meanwhile, those who cancel policies early are also charged up to £75 by certain insurers.
The investigation was carried out as part of Which?’s Sneaky Fees and Charges campaign, which has highlighted hidden charges on everything from bank cards to airline bookings.
The consumer group is calling for all fees associated with setting up, amending or duplicating any type of insurance policy to be “reasonable” and no more than the cost to the company. It also wants all fees to be laid out clearly at the time of taking out the policy.
Which? executive director Richard Lloyd said: “We’ve found some insurers charging customers eye-watering admin fees that can be hard to avoid, and people often don’t know what they are actually paying for.”
IGO4 Insurance, which is endorsed by brands including Aviva, Ageas and Provident, was ranked as the worst car insurance provider for consumers. It, alongside Budget and Endsleigh, charges a £75 fee for exiting a policy early, more than £25 higher than the average fee of £49.55.
It also charges £75 for customers to leave during the 14- day “cooling-off period” after they have taken out a policy – a time intended for consumers to decide if they want to continue with a policy.
Indeed, two-thirds of providers charge customers for leaving during the “cooling off period”.
Under regulations laid out by the Financial Conduct Authority (FCA), providers are allowed to charge for any cost they have occurred in processing – such as commission they have had to pay out if the policy has been provided by a third party – but they are not allowed to make any profit on the fee.
Kwik-Fit, which was ranked second worst in the study, has the highest fees for a consumer paying their car insurance monthly, charging a fee of £35 plus a variable interest rate.
Meanwhile, Age UK, NFU Mutual and Volvo Car Insurance – the top three ranked insurers – do not charge customers anything for making changes to their policy, or for cancelling or leaving a policy early.