Best and worst home insurance companies for fees

What fees does my insurer charge?

We've compared the fees charged by home insurers. Our Which? fee score shows how competitive the insurer's fees are compared to its rivals. 

The higher the score, the fewer (or lower) fees that are charged. APR is the interest rate you are charged for paying monthly rather than annually.

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Best and worst home insurers for fees

The best insurers for fees in our analysis were: 

• First Direct - 100%
• HSBC - 100%
• Santander - 100%

These, along with eight other providers, didn't charge any admin fees covered in the table. But in addition, these three providers will pay your costs in early cancellation fees if you switch to them from another provider.

Of these insurers, the best policy score was for Santander's Plus policy. But even that was beaten by many other insurers' policies, meaning fees alone shouldn't determine which insurer you pick.

Swinton was at the bottom of our table with a fee score of 35%. Its fees include a cancellation fee of £40 for cancelling the policy before renewal, and a £30 for making mid-term adjustments to your cover.

The Co-operative Insurance was meanwhile the highest-charging in our table for customers paying by month, with an APR of 29.9%.

• Find out more: the best home insurance companies

Home insurance fees and charges

Many home insurance providers charge extra if you want to make even common changes to your home insurance policy.

Setup fees

Some insurance companies (typically brokers) will take a fee of up to £36 for setting up the policy or renewing it.

Interest rates for paying monthly

If you're paying in monthly instalments, you'll be saddled with one of the most common and costliest extra charges: interest. In our last survey of the market, we found APRs as high as 29.90%. 

Payment default

Nineteen of the 78 home insurance policies we reviewed charged payment default fees if you miss a monthly payment, the highest being £40.

Adjustment and duplicate document fees

If, while the policy is running, you need to make some alterations (for example, if someone moves in or out of your home), you may find yourself on the hook for an 'adjustment fee'. If you need extra copies of paperwork sent to you, this can incur a duplicate document charge.

Cancellation fees and switching fee contributions

If you decide to cancel your policy ahead of renewal, most providers will charge an early cancellation fee. 

An insurer can even charge a fee if you cancel within the 14-day cooling-off period when you first take out the cover, provided it reflects the cost the insurer has incurred setting up the cover.

However, you may find insurers that offer to take the sting out of switching to them early by reimbursing some or all of your cancellation fee.

Should you pay your home insurance monthly or annually?

Most insurers will allow you to pay for your cover by the month if you can't afford to pay upfront. For some customers, spreading payments over the year is the only practical way of paying for the cover, but it often comes at a cost.

Half of policies in our survey add interest to monthly payments, with APRs in some instances verging on 30%. While home insurance APRs (and the premiums to which they're applied) aren't as high as in car insurance, we think they're still often too high, as they can be comparable to what pricier credit cards charge.

One potential way to bypass the insurer's interest rate is to pay for your insurance using a credit card with a 0% interest period of at least 12 months, then pay that off in monthly instalments over the year.

'Admin fees are a hidden sting in the insurer's tail'

Dean Sobers, Which? home insurance expert, says: 

Home insurance premiums have risen in recent years, to the exasperation of many policyholders, but at least they're out in the open. Admin fees are a bit more subtle. 

Adjustment fees – covering fairly trivial bureaucratic costs in amending your policy to reflect changes in your circumstances – can be as high as £30, which feels a bit excessive when other providers can cover this for a third of the rate, or for no charge at all.

The steepest admin fees are for leaving your insurer before your policy's renewal date, with some insurers claiming nearly £60 for the brush-off. And some customers might be surprised to find that (lower) cancellation charges also apply should you change your mind about an insurer during the cooling-off period, with a handful of firms charging between £15 and £25 to recoup their expenses in setting up your policy.

Most customers won't need to pay admin fees. But in the same way that we probably won't claim and therefore probably won't pay an excess, it's still worth checking what these contingent costs could be when comparing policies. There could be a nasty sting lurking in the smallprint.

How we analyse insurers' fees  

The Which? fee score is our assessment of how reasonable different providers' fees and charges are.

We look at seven fees, including the interest you'd be charged if you pay in monthly instalments, administrative fees for setting up the policy, penalties for missing payments, and what you'd have to pay if you cancelled your policy before renewal. 

We also look at 'switching fees', which is an amount the insurer will pay towards customers who have switched to them in the middle of a year and incurred a cancellation fee from their previous provider. The switching fee is intended to help offset this cost.

Initially, we score policies out of five in each area. The lowest fees receive the highest scores (except for switching fees, where the highest fee contributions earn the most points). The fee score shows how well the policy did across all rated fee areas. Products with higher fee scores charge generally lower fees. 

Interest rate and setup/renewal fees, which are likely to have the most pronounced or widespread effect on policy costs, are weighted so as to have more of an impact in the fee score than other fees (such as duplicate document charges).