Drivers have faced car insurance fee hikes of up to 200% over three years, new Which? research finds.
Between 2011 and 2014, Which? Money tracked the administration fees that 28 insurers charge for altering or cancelling policies. Of these, 13 have raised fees and eight have introduced new ones.
Allianz and M&S, for example, have introduced £50 cancellation fees, whilst The AA and Hastings Direct now charge £28 and £32.50 respectively for setting up a policy.
Go further: Car insurance fees – our table lists all the fees charged by dozens of car insurance companies
Insurers are likely to levy a charge – in addition to any change in premium – if your details change during the term of your insurance, such as a change to your surname, address, or car registration number.
Hastings Direct charges the most for mid-term policy adjustments (up to £35) – with nine of the 28 insurers charging fees that are half or less this amount.
Cancellation fees are charged if you terminate your policy before it expires. These are typically around £50, though the highest – charged by Endsleigh – is currently £75. On average, cancellation fees have gone up by almost a fifth (19%) in the last three years – though Endsleigh’s has actually tripled (up from £25) over this period.
Stop Sneaky Fees and Charges
This investigation comes as Which? launches its campaign to Stop Sneaky Fees and Charges on financial products – with recent consumer research revealing that a quarter of those who have paid insurance admin fees didn’t expect them – and just one in three felt that the policy’s fees were made clear before they purchased it.
Which? wants fees on all financial products – including insurance, mortgages, bank accounts and credit cards, to be upfront, fair, and easily comparable as part of the overall price.
Go further: Stop Sneaky Fees and Charges – support the campaign by signing our petition
Paying more than you bargained for
Which? executive director, Richard Lloyd said: ‘Consumers are fed up with being hit with unexpected, additional costs for financial products that lead to them paying more than they bargained for. These fees can be hard to avoid, and people often don’t know what they’re really paying for.
‘We want the financial services industry to Stop Sneaky Fees and Charges, and put an end to excessive, unclear and hard to compare fees that do nothing to improve the low level of trust in these markets.’