/ Home & Energy, Money, Motoring

Stop ‘rip-off’ home and car insurance charges

Pick-pocket stealing money

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
Profile photo of DavidA
Member

RIAS – Home insurance, monthly premium £8, increased mine to nearly £11 without so much as hows your father, so I cancelled within 2 weeks. They have sent me a bill for £15 cancellation fee and £3.98 charges totalling £18.98p… they think they can increase their premiums under a recurring policy by 30%+ and get away with it. I think distance selling regulations might apply, increased premium etc.. So am going to check, not going to pay it without a FIGHT!

Profile photo of Shaz
Member

Car insurance, cancelled within two weeks of starting one up as their prices doubled from 69pound to 120. Found a better deal and accepted the fee but charging us 112 on top for wot we used. Despite being conned, we don’t get paid til end of month but won’t accept the wait.

Profile photo of grania
Member

hastings direct will charge me £45 cancellation fee , plus ,arrangement fee of £20 ,plus call centre arrangement fee of £12.50 and any charges made by the insurer, so i guess they are just a broker. So strongly suggest you avoid hastings direct, or hastings anything.That was from Go Compare and they dont compere admin charges.

Member

I have just rang my car insurers to inform them of my address change.My car is now garaged under lock and key yet was told i have to pay £92.75 for this change !!!! I am furious. A £ 25 fee for address change and the policy fee has risen due to a post code change !!! Its all a scam and the government should stop this.Quotes can vary for the same cover by £ 500 its a huge scam.Avoid Hastings Direct.

Member
Gav says:
8 April 2016

One Call Insurance want to charge a £39.00 admin fee to change car on policy due to old car been written off after I was crashed into (not my fault). Had this with the banks charging stupid fees for letters surly this sits within the same money making scam.

Member
Giby says:
12 July 2016

1st central insurance. £15 admin fee. £275 increase in just address change. In effect my monthly premium has skyrocketed to £67 instead of £48. They are saying its a high risk area and they got more number of claims. Any hope to get it lowered?

Profile photo of malcolm r
Member

I’d shop around other companies – Which? recommend a number. Then if you get a lower premium try negotiating with 1st Central. Otherwise move – you might get an early exit charge but worth it if you save overall.

Member
joey says:
18 July 2016

what do you expect. this is Britain. that why I am leaving this country to a better country.

[Hello Joey, your comment has been tweaked to align with our Community Guidelines. Thanks, mods]

Profile photo of duncan lucas
Member

Thats not true Joey like any country it takes a while to get to know people , each country has its own idiosyncrasies , no country is perfect there are good and bad in all countries . Each country goes about life and business in its own way , somebody coming from another country where they grew up living life a certain way particular to where they came from finds it hard at first to settle down or understand that country but once you learn some history of this country and the strength of the people in adversity (like the two WW,s ) then you appreciate what makes a person a British citizen .

Profile photo of malcolm r
Member

The real country is its people. In all countries the vast majority are good ordinary people. We must not judge a country by the small minority who are a stain on its character. Even if they hold power – which unpleasant small minorities often do (a bit like some businesses and organisations really).

Member
Brian Buxton says:
23 August 2016

Just changed my Address with Hastings Direct. £25 Admin charge, £96.71 on premium. Is there an Insurance Ombudsman. I have moved about 1 mile to quieter area. Rip off or what.

Profile photo of John Ward
Member

Yes, it’s the Financial Ombudsman Service.

Profile photo of malcolm r
Member

The quieter area you moved to may be more of an insurance risk, hence the increased premium. You could look at this by getting quotes from other insurers for your new, and your original, address. The fee for change of address should be in your insurance documents.

I’d suggest you need to put a factual case together that demonstrates you have been ripped off, make a formal complaint to Hastings Direct and if that does not reach agreement then consider involving the third party. Your insurer should tell you how the complaints procedure works. My guess is, if the premium reflects your new location, and if the fee is in your documents, there is no case.

Member
Aimee says:
8 September 2016

OMG…Hastings Direct as i make this comment are trying to Charge me an Extra £284 Premium charge for Them deciding to double check 3 small matters on my Policy details, inputting 2 minor ammendments on my Policy which is my first car I actually was able to purchase myself, In my name & Fully Comprehensive, I paid for 12months of cover outright..which was 3months ago!!??? £25 of the £284 is the Admin charge for ammending a Policy I fully accept that (Well for the Temp Agency Admin Office Junior that has done the Typeing of the ammendments is what they mean its for) BUT REALLY??? Im a Single Mother of 1 young Son, im On very Low Income, Un-Employed as signed off for Depression due to my Sons father being killed 12months ago in RTA & they ‘Randomly Crawl out the Woodwork, suddenly needing Info that obviously isnt needed IF Policy set up & accepted, £ taken/swallowed up 3months ago & Demanding i pay EXTRA £260 within 14days or whole policy will be cancelled, Money ive paid totally gone to them & so Id Have to sell my Car leaving my Son & I without our Lifeline to family & friends!!???

Member

I am moving house next week to a lovely private cul de sac in a great area (1 mile from my current address)…. and my insurance is set to rise by over £100 a year (which is a third of the total price!) plus a £25 charge to change the policy documents….disgusting. Thanks but no thanks Lloyds Bank (underwritten by Ageas Insurance Ltd)

Profile photo of malcolm r
Member

Sam, why not check by getting quotes from other insurers for both addresses to see what differences there are. You could then have evidence to challenge your current insurer if you think they are out of line.

Member
Lorraine says:
10 September 2016

Hasting rob dog smart smiles!! Avoid ! Avoid! Shameful company, ripping youngsters off, they should be closed down.

Member
Mark Burston says:
18 October 2016

Hastings direct want me to pay them an extra £35 to cancel a fully paid motorcycle policy with 6 months remaining and thats with the cancellation fee being waived. They also tell me I cant just let the policy run. What a scam!

Profile photo of malcolm r
Member

Mark, presumably a 6 month policy would be more expensive than a 12 month policy and this is reflected in the extra charge?