This week an in depth report has uncovered some astonishing car insurance fees which you should be far more aware of when you’re renewing your policy, they report on their website this week.
On their website, Consumer Watchdog Which? Executive Director, Richard Lloyd, says: “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.”
‘We want companies to ensure their fees reflect actual costs and aren’t just a way to squeeze more money from customers.”
Which? reports that they have looked over 44 insurance brands and found that some insurers add on twice the average fee to your policy. They have started up its own “Stop Sneaky Fees and Charges” campaign on their website and calls “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”.
We’ve highlighted some of the key findings of their latest report below for you – but the full article can be found here
Set Up Costs and Car Insurance Fees
Which? reveal that “four insurers charge set up AND renewal – to pay for the cost of arranging cover”. They found that Hastings Direct charges £20 for car insurance renewal and 1st Central charges £50 to set up AND renew
The good news here is that 36 insurers don’t charge for credit card payments so a top tip is to pay for your policy with plastic – and shop around for those who don’t charge for the privilege. Which? found that Admiral, Elephant, Diamond and 1st Central charge fees for paying by credit card.
Which? also report that “Kwik-Fit has the highest fees for paying your car insurance charging a fee of £35 plus a variable interest rate, which are combined to create an APR”. In Which?’s own investigation it offered them a whopping APR of 64.4% “compared to an average of 22.6%”
Car Insurance Fees for Cancellation
Which? found that 3 companies charge for cancellation and a high number charge for cancelling whilst you are still in that ‘cooling off’ period.
Which? name the worst offenders, charging £75, as Budget, Endsleigh and IGO4 – with the latter also charging for cancelling whilst you’re cooling off, asking you for £75 to do so. LV charge £40. That said, they are not alone as Which? found that “30 insurers charge for changing your mind and cancelling during the 14 day cooling-off period” – that is just over 2/3 of the insurers examined charging a fee to stop the policy almost as soon as it’s started.
And if you lose your certificate? The average cost here is £14. Which? found that “Axa and Swiftcover will ask you for £30 for sending out a replacement insurance certificate or a copy of a policy document”. That said, most companies are open to a good old haggle here (particularly if you do your research, check what you paid last year, shop around a bit and doublecheck that what they’re offering you is the same detail of cover as last year). So go on, don’t be shy…
Finally Which? found that if you need to ask them to alter your policy for any reason – change your name, address, job or other details, for example – IGO4 also charges £35, which is a tenner more than the average of £22.79. That said, lots of insurers don’t charge for this so always worth checking the small print. Another top tip here is to change your policy ONLINE as this rarely incurs a charge.
Information correct on 18th August 2015