/ Home & Energy, Money, Motoring

Stop ‘rip-off’ home and car insurance charges

When I moved house recently, my bank account and credit card provider changed my details without a charge or fuss. So why won’t car and home insurance companies do the same?

Insurers are fighting a fierce battle to appear at the top of comparison site listings and win car and home insurance business.

But while headline prices appear low, if you make any minor changes to your details (such as getting married or moving house), choose to pay monthly or even cancel your policy, you could find yourself hit with hefty charges later on.

Big household names such as AA Insurance and Hastings Insurance are among the worst offenders, but they’re not the only ones.

Policies chock-full of charges

Consider a few examples from a variety of insurers:

  • If you want to pay by instalments, you could be charged an APR of over 30%. Some providers even charge a credit set-up fee.
  • Some providers will charge you a policy set-up fee, followed by a renewal fee a year later.
  • Make changes to your insurance policy and you could be charged up to £35. That’s not including changes to your premium based on your changed risk profile.
  • If you need a duplicate copy of your policy, you could have to pay up to £35 for it.
  • And if you want to cancel, one insurer we looked at will charge you a whopping £75. Others charge as much as £55.
  • Some providers will then work out your refund on a ‘short-term’ basis if you cancel. This could mean that you won’t get a pro-rata refund, but a lower amount. For example, cancel in month three and you might only get half your premium back.

It’s inevitable that many customers’ circumstances will change, and the costs of updating their details on an insurer’s system shouldn’t be an opportunity for the company to extract further profit from you.

Who should take charge of charges?

If you change address or vehicle and your new circumstances mean you pose an increased risk to the insurer, it’s only fair you should pay extra to cover the revised premium.

However, fees should be proportionate to the cost incurred by the insurer. And, at the very least, all fees should be clear at the outset and available on the insurer’s website, not just when documents are sent out.

All too often it’s a lose-lose situation for the customer. Update your personal circumstances and chances are you’ll be charged for it, but don’t update them and your policy can become invalid. Cancel the policy instead and you could be hit with even bigger charges.

Car and home insurance costs enough without insurers and brokers squeezing every last penny out of customers making common changes to their policy or paying by instalments.

What’s the biggest insurance charge you’ve been hit with? And who do you think should pay for common changes to car and home insurance policies?


One call insurance charged me £92 .. something like £24 admin fee. My husband got a refund with Saga obviously same postal address. Also Aviva didn’t charge to upgrade home insurance . One call say the postcode is higher risk .. so why don’t the other companies think so? I complained on the online chat and via Twitter they just say sorry . I’m going to take it further . How can they justify the admin charge ? I changed the details myself and they don’t even send paperwork out . At a rate of £12 an hour that’s 2 hours work . It would have cost me £55 to cancel the policy and go elsewhere . I will NEVER BUY FROM #ONECALL INSURANCE AGAIN AND HAVE CANCELLED AUTO RENEW. Sage will get our business based on how helpful they were with my husband .

Karen – Different insurance companies each have their own ways of assessing risks and have their own special selling points to make insuring with them more appealing. Most risk assessments are based on actual claims experience.

My guess is that because One Call is locally based mainly in South Yorkshire it has a very good idea of the risk profile in its home area but may be less well informed in other parts of the country by reference to the smaller proportion of its customers living elsewhere. Not knowing where you live means I cannot give a reasoned explanation for the differences in your case and it could be favourable or unfavourable to you depending on how One Call’s knowledge works to your advantage – or not as seems to be the case.

On the other hand, Aviva has a huge customer base spread across the UK and can average out distortions in local claims experiences to enable it to make a no-charge offer when dealing with a change in cover or address.

Saga look at things from a different point of view because their more mature customer base is more predictable and the company’s knowledge of their portion of the market is therefore more indicative of the relevant risk factors.