/ 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?

Comments

Asda car insurance
I activated a policy with theses guys
And two months later found out they was over charging me I question them on this and they stated u provided incorrect detail so your charged £345 extra .
Information was how long have you held a full driving licence = 6 years
When did you pass ur test 2 months ago which is correct information six years ago I passed a full bike licence photo card states full uk driving licence .
They stated to the effect of tough luck and if you cancel we will charge you £345
I was descusted

Post Office car insurance

I have just rung the Post Office to cancel my policy as I am selling my car, think I am about 9 months into the policy…they told me I had to pay over £300 for cancelling…can they do this!!!! I was expecting an admin fee of some sort. Can anyone help pleaseeee

Nikieta says:
28 September 2012

funny you mention that….i was just on the phone to the post office and they told me that it’s gonna cost me £340 to cancel my insurance…however my next monthly payment is on the 4th of October and if i cancel my insurance then it will cost me £394 to cancel!!! how do they work that one out!!! STUPID POST OFFICE!!! good thing im switching and leaving them for good… i;ve been with them for 16 months…. and got another 6months left out of the 12…. is it cheaper for me to cancel them now or just wait… im sure what their doing is wrong….helpppp!!

Bernadette says:
12 October 2012

Hi

In the same situation, however, came across this link and now writing to the Insurance company and Finance company.

Check out this link: http://www.monetos.co.uk/insurance

It states: The FSA aims to protect your rights when you sign a legally binding car insurance contract. You can cancel your contract without penalty in each of the following circumstances:
when your policy term comes to an end
if you sell your car, or it is written-off, or stolen and not recovered
during the fourteen day cooling-off period (see Cancellation)

Hope it is of some help and not to late for you.

Regards
Bernadette

Nikieta says:
28 September 2012

i’l be happy to pay £50 to cancel my insurance than £400… I just called them again and asked them….say if i had a month left of my 12 month agreement…how much will it cost me to cancel…they told me the full yearly premium.. ie £1200 !!!! POST OFFICE….YOU TAKING DA P**S!!??

John says:
3 October 2012

I’ve just canceled my classic car insurance as they dont do normal policies.
My previous insurance broker said I won’t get any refund towards the last 3months insurance finance as the policy is over 6months old.i’m now left with £182 to pay finance company

colins fuming says:
10 October 2012

well complaint is almost like out of a joke box. I am currently insured with Hastings Direct ( who I have been for years) 9 yrs NCD protected, I have recently bought a new car (sept 2012) and had to have a temperary cover note for it as I already had another car insured and this was to expire at the end of this month (oct 2012). now when the temp cover note was to end on 13th oct I decided to move the new car over for the remainder of the month and try and reinsure the old car for a new 12 months as zero NCD (scratch), so heres the best bit. the new car had been hit by another driver on 8th oct and he admitted the damage, his insurance agreed they were liable and will fix the damage with no cost to us. even better is that even though I wasnt using the car on that day, im still penalised as I own the car, my wife who parked the car up on that day is also penalised as she used it last ? shes a named driver on my policy (fully comp) and has her own 5 yrs NCD on her own car. no one was in our car at the time (parked up) and we havent claimed anything from our own insurance company as we werent involved yet now as my renewal is up and I am trying to get both cars insured (legal requirement) they are trying to make out that both my wife and me should accept hefty increases. the old car has increased from a quote of £245 upto now £400 third party fire and theft and my new car has increased from £277 to £400 full comp??? how is this kind of increase fair (doubled) and also why does it affect both of us…..this is more like a scam than a realistic insurance risk.. and best of all no one is willing to help any of us, its makes your blood boil. haha and the best of it is the other driver who hit it wont increase that much either for causing the damage.

colins fuming says:
10 October 2012

more to the my previous message. even worse is the fact that I have 20 years no claims and my wife has been a named driver on my policy for 13 years and yet most insurance companies wont accept this and decide on there own recognisable claim free years. I did some comparison websites and got decent quotes and this was with mentioning the non fault claim, but when I called the companies up they checked through my details and then upped the premium to almost double the comparison sites quotes. its pure bull how they work us…. namin a few, the post office increased it by almost double, ESure almost 2 times the quote ? and hastings quoted over 3 times the amount and then said they could quote in it doubled the quoted figure for the older car and over 25% on the new car with the no claims bonus. all in all 2 cars which should have been between 400-500 to insure for both are now nearing £1100 to £1200, so come on math heads work out why were more of a risk

Michael Padfield says:
15 October 2012

Iv’e been told by one insurance company that if you have more than 6 seats in your vehicle, in my case, a Mercedes Vito dualine 111 cdi, it will cost twice as much to insure. I use mine for private/social/domestic purposes. Anyone ever heard of this?

Yeah some insurers have a rating on 6+ seats, you are properly better investing the time in searching the market.

ruby says:
15 October 2012

need some advice, completed an on-line car insurance using their crap application, constantly had to re-enter data etc. anyway finally accepted the policy thinking my changes amended the policy, however the policy was entered to start in a week ahead of the insurance company taking my deposit. the only reason i found out this was when asked them when it was going to be entered into the mid database, they told me 7 days after policy, when Asked them to change my policy date, i was told need to cancel the current policy which hasnt event started and lose my deposit and then start a new one also pay for £50.00 arrangement fee. where do i stand?

WOW! That doesn’t sound right. Are you going through a broker if so what is their name and who is it underwritten by?

Depending on the underwriter(insurer) they should provide a cooling off Period from the inception date of the policy and in your circumstance you shouldn’t lose the deposit if the policy hasn’t started. Again depending on the broker you may lose the arrangement fee in this case unless they aren’t money grabbing.

I need more details to help:
Start date of policy
Date you informed them of incorrect details
Underwritten by: i.e Acromas group
Broker: i.e Bewiser

http://www.monetos.co.uk/insurance

It states: The FSA aims to protect your rights when you sign a legally binding car insurance contract. You can cancel your contract without penalty in each of the following circumstances:
when your policy term comes to an end
if you sell your car, or it is written-off, or stolen and not recovered
during the fourteen day cooling-off period (see Cancellation)

thanks to Bernadette for this, further up the list

We’ve published a new debate, along with a poll, asking ‘What’s the best way to buy insurance?’: https://conversation.which.co.uk/money/buy-car-travel-home-insurance-broker-comparison-site-provider/

I recently made a claim on my insurance. I was immediately hit with a £50 administration fee. On complaining it was reduced to £35. I also choose to have my car repaired at my local main agent. I was told that I was not entitled to the courtesy car my policy had. I also had to pay insurance on the courtesy car for the two weeks my car was being repaired. In all it cost me about 30% of my original premium to have my car repaired.
I took out my insurance with a broker called One quote direct. The policy was with Allianze. The policy states that an admin charge is payable for any changes. So how making a claim is a change defeats me. The policy also states that any car that I drive with the agreement of Allianze is covered on the policy. So no further premium should be payable. I am now in dispute with the insurers.
I exercised my right to have my car repaired at a garage of my choice. It seems that one is between a rock and a hard place. I have a relationship with my local main agent and, as they do the repairs on the premises, I would expect a good job. The insurance company, for reasons of cost, want me to go to an ‘authorised’ repairer. I would not expect such a good job as a main agent. It cost me dear to have my car repaired properly.

Glenn says:
12 November 2012

Dont think just because they are main agent that they do a better job, this is never the case.

Raymond says:
6 November 2012

I have recently bought a new car, on that day I informed my insurer (easyinsure.co.uk). They would no longer continue to insure me with my new car due to the car group type and that I have only been driving for only 3 years. I told them to cancel the policy but with only 2 months left remaining they insist I owe a cancellation fee. This is ridiculous that I am forced to leave them and they are charging me for it. Is this correct, can I do anything about it? I do not expect charity but they can no longer provide me there service and are insisting on a cancellation fee. I am sick of these companies ripping us off, new legislation must be put in place to stop this and further more they must be enforced just as the FSA enforce the banking industry.

Bernadette says:
7 November 2012

Hi
I posted a comment previous regarding my car insurance company, One Call, charging me £52.00 to cancel my insurance even though I had sold the car. I sent them a letter of complaint quoting the information on http://www.monetos.co.uk/insurance, that is, you should not be penalised for cancelling your car insurance if you sell your car. I received a phone call from One Call complaints department, stating as a gesture of goodwill they would pay the £22 cancellation fee, however I was still liable for the £30 (last month’s insurance). I told them I wanted to escalate this further. The adviser changed her tune. In the end I did not have to pay anything and One Call agreed to pay the finance company the outstanding £52.
Mentioning the FSA certainly seemed to have done the trick.
Regards
Bernadette

fiona says:
22 November 2012

I recently got married and have been going through the process of changing my name. Just tried to change it on my car insurance only to be told they now have to change my policy to today’s prices, £20 more per month. What a rip off. I only took the policy out 4 months ago. I haven’t had an issue with any other company. I also get the pleasure of paying a cancellation fee for changing. I will be cancelling, just out of spite. The company is RAC – won’t be using them again.

Tony Wah says:
7 December 2012

Its compulsory for you to inform of a change of address, agreed, a five minute conversation with the typing of several words does not amount to £25, this equals over 25 % of my total policy cost !! At some point this must become unfair and challengeable.
I have to say with this sort of legalised robbery going on is it any wonder people take full and even unfair advantage of insurance companies.
I won`t be renewing my motorbike policy with Bennetts ( 3 months left to run ) thats for sure.

nasir says:
17 December 2012

Insurance company : INSURE THE BOX
Change of Circumtances: unemployed

I have been recently asked to pay £87 just to press some buttons or get your policy cancelled. Didnt mension anything on their policy document regarding “change of circumtances charges”.
I have spoken to OMBUDSMAN, they said if they didnt mension the charges then we cant dispute but they agreed the amount is too much. they adviced to call your insurance company back ask for the written decision, i did, they will send the written notice to pay 87 pound else will cancel the policy. As soon as i have received the letter i will contact Ombudsman.

any comments?

gutted says:
19 December 2012

i have just been stung for £49 by Likewise car Ins (Hastings Group) for a 5 minute conversation in on the phone for changing my address, the advisor told me that £35 out of ths £49 is for an administration fee?????????
All they have to do is type in my new address ! i am the one who should be charging admin costs to them, for the cost of the flippin phonecall and the wait of getting to speak with a human!!!!!
im not a happy chappy, think i may write them a nice letter outlining my admin fee too.

Simon Edmund says:
20 December 2012

insured with Kwikfit insurers and have recently moved from Yorkshire to Merseyside, so I contacted the insurer to inform of change of address. I was told that the underwriters will not provide cover for my new address so they said they will try one of their other insurers and came back with a qoute from AXA of £1,500.52 pa, considering my previous insurance was £860.00 pa this is a considerable incease, if I wanted to pay monthly I would have to pay £172.33 deposit then 11 monthly payments of £145.42. The alternative I was told to cancel the cover and be charged £151.90 cancellation fee. They then got back to me to say they can continue the cover but it will cost me £119.00 pm.
I do not have an problem with paying extra premium for cover in living in a new area but what annoys me is that the only thing I have done is changed address and it is the insurer who are claiming they could not provide cover at my new address, so why should I have to pay a cancellation fee?
I did a search for insurance qoutes on Comparethemarket and KwikFit have provided a qoute of £989.97 pa and to pay monthly there would be a deposit requirement of £99.00 and 11 monthly instalments of £100.17.
Is it me or does this seem rather suspect wrangling by this insurer.

Simon, have you tried the Which recommended insurers? I moved to Nationwide (provided by Liverpool Victoria) and got a good deal, and my wife insures through Cooperative with another good deal.

vikki says:
28 December 2012

I have car insurance with One Quote direct. I was charged additionally at the start for going to work, apparently the comparison site did not include commuting to work, this was three weeks into the policy when they had my deposit and 7 days cooling off had clearly passed 🙁 then I moved house twice first time changed postcodes charged me £50.00 admin fee then moved same postcode and now I am to be charged £35.00 admin fee reduced cause the guy felt sorry for me and £388.00 as new area (same post code) is a very high risk area. boo hooo! are these charges legal my quote £500 now over £1000 for a 1.6 focus after 13 yrs NCB

Pavster says:
15 January 2013

Tried to change my address on Aviva’s website for Car Insurance and it doesn’t allow it. To add insult to injury, moving approx 200metres down the road is looking like it may cost me £280 on a £650 policy. I’ve only had my policy for 2 months and if they won’t do anything about the price, I’m leaving.

Cannot believe the price difference, it’s shocking!