Car Insurers Charging “Eye-watering” Admin Fees

August 20, 2015

Many of the UK’s leading car insurance companies are charging their customers “eye-watering” admin fees on a routine basis, according to the consumer watchdog Which?

Veering away from the subject of car insurance premiums, Which? insists that some companies are levying what it calls “sneaky fees and charges” that “don’t seem to reflect the cost to the company”.

An in-depth study carried out by the watchdog investigated the fees charged by 44 insurers operating in the UK, with practices varying greatly among those service providers.

According to the research, consumers are being charged in some instances for a wide range of incidental processes such as having an annual policy renewed, changing personal address and contact details, and cancelling a particular policy early.

However, while some insurers don’t charge any fees at all for any of the above processes, others charge their customers simply for paying their car insurance on a monthly basis.

“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,” said Richard Lloyd, executive director at Which?

“We want companies to ensure their fees reflect actual costs and aren’t just a way to squeeze more money from customers,” he said.

Tips from Which? on how to avoid having to pay some of the fees car insurers charge their customers on a regular basis include using a 0 per cent credit card that allows for at least 12 months of interest-free purchases.

The watchdog and consumer advisor also recommends applying for and arranging car insurance deals online rather than over the phone to avoid certain charges. Plus, haggling with insurance providers over any fees that are discussed is advised in case they can be dropped.

At the industry level, Which? has made clear it wants to see car insurance companies only charging their customers what it actually costs them to carry out routine processes such as amending or renewing an insurance policy.

There have also been calls for a greater degree of transparency on the subject and for it to become easier for consumers to learn about and compare the fees that various insurance companies charge.