Which? criticises motor admin fees

Drivers are being hit with a range of additional fees when they renew or change details on their car insurance policies, according to Which? research.

The consumer campaigning organisation analysed the administration fees of 37 UK insurance companies and found that the average charge for making an adjustment to the details of a policy was £19.

Hastings Direct and 50Plus Insurance Services were the most expensive of the companies investigated, charging £35. The research found that only 20% of the firms in the study did not charge for a policy update.

Renewal charge

Hastings and 50Plus also charged for renewing a policy when existing policies expired. Both of the companies charged £20 on top of the policy premium, an increase of £15 over the past six months.

Hastings Direct told Which? that all insurance companies incur administration costs at renewal “whether they choose to disclose that cost as a separate fee, as we do, or wrap it up in the total premium price. We believe our approach is more honest and transparent.”

Duplicate policy documentation was another area Which? investigated. It found that requesting an additional copy of policy documents could cost as much as £26 from Esure or Sheila’s Wheels, while the AA, Endsleigh, RAC and Zurich charged customers £25.

Cancellation fees

To cancel a policy, the average charge for a consumer was £40, rising to as much as £70 for RSA customers with an echoice policy with a premium above £300. Only four of the insurance companies studied did not charge a cancellation fee.

Which? executive director Richard Lloyd said: “We’ve found that drivers are being stung with a range of additional fees when they come to renew their car insurance, or even just update their details on their policy.

“Fees should reflect the actual costs incurred by the company, and not be used as an excuse to squeeze more money from consumers who have little choice but to pay.

“We also want to see all fees made available on the insurer’s website and not hidden in lengthy policy documents, so that people can compare companies more easily before taking out a policy.”