/ 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?

Jakki says:
12 February 2013

I had to add business class to my car policy so that I could take a colleague to work with me. My employers told me that I had to have it!!!! SWINTON insurance will Not be getting my business in future as they charged me £52 for this change. Rip off or what!!!!

karen says:
11 April 2013

im moving house,and just rang my car insurance company. to change address,and havin different postcode,is costing me a extra 143 pound.con.

andrew durham says:
16 April 2013

i want to know how and were do i go to have a insurance company investagated on the busness practice, i have been payng by pre auth payments but they no longer wanted it done that way so i started paying them in full starting 2011 2012 now 2013. I have notice they have been taking monthly installments that i never noticed till now so i know how companys work hold u up then wait till u are tired and they know most people cant afford a lawer so they play the waiting game so if this is what they want to do to me then i want their practice investigated because i strongly beleave i,m not the only one with issues with this company.
Which by the way is CO OPERATORS, they also switch there name a little each time they move around so whom and were do i go for my right and protection.

Sarah says:
29 June 2013

We have just moved house & have been charged £350 by alan & alan to change the address they say its because of the postcode .we weren’t leaving to go to a different insurer we are staying with the same insurance company so why have they charged us they should be greatful we are staying with them.it takes 2minutes to change an adddress on a computer & print it off not £350 its ridiculous.

bingo says:
1 July 2013

Could you of got a new business quote with another company and compared before agreeing to the new terms? Then if it was cheaper take out the new policy, forget about your current policy if already paid for and then at the end of the old policy life claim back the money for being duel insured? You would have proof of the pudding….Don’t think having your home dual insured is illegal… just a thought

Sarah says:
29 July 2013

Hi bingo sorry its the car insurance that charged us for moving house they said we had moved to a higher risk area.we have moved a few times due to personal matters.the first time we moved we were charged £195 which was apparently because our post code went from ch1 to ch2 then we moved again after 8 months to an area with a ch65 post code & we didnt have to pay that time because they said it was a lower risk area.this is our last move now because we are now settled.this area is still a ch65 area but the car insurance charged us £350.every time we have moved they have said they have charged us because of the first part of our post code which went from ch1 to ch2 so thats the 1-2 then nothing for the ch65 4aw but now they are saying its because of the ch65 9ea so it because weve gone from 4aw to 9ea.

Lockhart says:
16 January 2014

Unfair charges RIAS home insurance policy of £43-69 when I cancelled my direct debit.
Failure to pay outstanding amount in full has been passed to a collection debt agency and you will incur additional fees of £15-00 administration charge.

Graham Hill says:
8 March 2014

Hastings Direct
What a bunch of A*******s…..I have six months left on my Motor policy which is a VW Passat, my change of circumstances is that I have changed the vehicle to another Passat, same model same year the only difference is the registration plate. Its even the same colour same Engine size. Because the Engine is goosed I thought it would be cheaper to replace the Car. So I rang them this morning explaining the situation, that I wish to cancel the existing policy on my old Car and renew the Vehicle details with the new Car. Remembering there is only six months left to run…how much do you think they wanted….£96….Unbelievable…they surely have you by the b******s when it comes to a situation like this. I am totally p****d off and they will be getting both barrells on monday morning.

Michael Bowers says:
24 May 2014

I contacted AA insurance to notify a change of address and also to change the date of direct debit payments. I had too many direct debits falling in the same week of the month – this is a problem when DDs account for 89% of one’s monthly income (I have only a state pension). The AA refused to change the payment date, and added an administration charge to the next payment. I now have to juggle with other direct debits in order to get through the month.

Thanks for your comment. I’m currently doing some work on insurance administration fees and would like to contact you, if that’s okay.

jams says:
18 June 2014

Hi Dean
I am with Kwikfit Insurance i have max no claims bonus, mywife i on the policy but does not dive my car, my wife had a very minor accident nodamage but a claim was made against her insurer LV I was advised byKwikfit that my insurance woulld go up by £150 pa i said i would take my wife of mypolicy, Kf said it would not make any difference i then change my car and they charged £30 for changing the number, i have a MW 520D my old car was aBMW 320d 2 ltr same as the 520d they increased myinsurance by 250 pa, i have since had quotes for half the price, but kf say if i cancell they will charge £50 cancellation.

Kind Regards

Kim Gray says:
27 May 2014

I had this happen to me today. Went to make a claim and found my policy was under my old address. I get regular correspondence about my premiums each year to my new address, so clearly they have been notified at some stage. It has cost me £25, but if I had been a new customer, there would have been no charge. This is just plain wrong and smacks of mis-selling. This has the potential to be another PPI scandal. If every supplier did this, it could cost a homeowner thousands to notify all them of a change if address. I pity those that rent and find they need to move through no fault of their own. It’s a scandalous practice and should be stamped on heavily by the Ombudsman.

james says:
18 June 2014

The Insurance companies are a Law unto themselves.

Lee says:
24 July 2014

Yesterday I tried to change my address on my RAC insurance. They wanted to charge me £25 for the pleasure. They then said that my current underwriter would no longer cover me and that I would have to restart a brand new policy with them for £150 a year more than i was paying before with Allianz. I did a quick search on compare the market (the company BGL Ltd supplies RAC’s insurance also own compare the market). At which point i was not happy, and to cancel they would charge Me £50 to that pleasure. So I had a choice, pay £150 more for my insurance, or pay £50 to cancel and go elsewhere. This felt like extortion!

Stop rip off Car Insurance! says:
24 July 2014

So, plenty of people unhappy with their current or previous provider….thing is…they will continue to rip us of as long as you’re with them.

Insurance company (especially car insurance) all price theirs on a “risk” basis so, don’t hesitate to compare before you end your Car insurance. One thing i do not understand is why they charge so much for an “admin” fee just to change anything? I think the relevant regulatory body should look into this.

We’ve just launched a campaign to Stop Sneaky Fees & Charges, including on car insurance. You can sign our petition here: http://www.which.co.uk/campaigns/insurance-bank-card-fees/car-insurance-admin-fees

The mac says:
24 July 2014

Done….shared…abd spread!

Excellent, thank you The mac!

I am being charged £75 just for changing my insurance company to a cheaper monthly
instalment, I tried to stay with Equity Insurance but they would not insure my car because
it was over 3years old.

So I have paid £84 which is my total instalments, £159.95 cost of time on cover, £25 for
Optional extras (whatever they are) fees £10.50 (no idea)
cancellation fee £30, (b——s!

Also a threatening if I dont pay within 7 days they will just take it from my bank ( without my

Does anybody care these days, or look into us being ripped off.———–NO

Tricia says:
2 September 2015

Done and shared!!!

Steve flatters says:
22 August 2014

Called Swindon insurance today to change address for my car insurance,instead of £270 the new policy will be £760! And another deposit,this is the second time they have found reason to renew policy ,what a con,can this be legal.

Chris says:
2 September 2014

Called Hastings to cancel my policy and they wanted £35, I said thats ridiculous, I’ll let it expire then as I’m getting rid of the bike it was purchased for and only had until Dec left on it. They said I couldn’t do this. Is there any legal reason why you can’t let a policy to expire rather than pay the cancellation charges? I understand the police check a database to see if a vehicle has valid insurance/mot so is this the reason? If I wrote to cancel the policy could they still try to charge the ‘cancellation fee’? They wouldn’t refund the 3+ months left on the policy either so what ever you do its lose lose.

I have exactly the same issue as you, sold bike, not getting another one and have 5 months insurance left. Phone to cancel and they want to charge me £35. I can’t believe it. Have you found out anything further??

I’ve rung to change the address on my driving licence. I’m moving within the same cm16 postcode. £34- what a ripoff. My policy is on-line so they don’t even have to send me an updated copy.

RAC insurance are threatening to cancel my policy if i dont pay £65 to change my address, even though i am moving out of London to Luton.

What thieving bar stewards they are…never insure with the RAC !!!

The whole vehicle insurance industry in the UK must be brought down for the fraud that it is, please people- campaign highlight, complain and do everything possible in every legal way possible until the cancer – which is the vehicle insurance industry in the UK is brought to Justice.

Kwick fit insurance won’t change my car insurance policy for my new car ! They say I have to keep the premium until my old policy runs out at the same cost keeping key cover curtesy car and other things I no longer need what a rip off and a £30 pound charge to change ? This is a total con can’t belive they get away with it

AA insurance charged me £109 to change vehicle with lesser insurance category. I’m not going to cancel – because of cancellation fees – paid up front in policy

[This comment has been edited to align with our community guidelines. Thanks, mods]

i cancelled my home insurance in july but they kept taking money they said I had not called back after a week to cancel after initial cancellation call, but last week they cancelled it and didnt ask me to ring after a week,what a rip off!!Totally annoyed is there anyway I can recover my money, it was santander home insurance and as i result am so p****d am closing my bank account with them, what a bunch of thieves holding onto to technicality of not ringing back, whatever the logic is it was meant to make you forget,am totally annoyed!!What do I DO