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What sneaky fees are lurking in your home insurance?

House with money

Has the cost of your home insurance been bumped up by sneaky fees? We’ve been investigating…

Paying out for home insurance is rarely an enjoyable experience. But, for those of you who enjoy peace of mind, like me, home insurance is a necessity.

When it comes round to comparing home insurance quotes you’d expect to pay the quoted premium price.

But what other sneaky fees and charges are lurking beneath?

The devil is in the detail

In our investigations we took a look at the different types of admin fees applied by 36 of the biggest home insurers. What we found was a very varied picture, which could leave you shelling out more money on policies that could have been cheaper elsewhere.

Admin fees are whacked on top for paying by credit card, cancelling your policy after (and within!) fourteen days, making adjustments to your policy (such as change of address) and getting a copy of a document.

Half of them charge adjustment fees, such as changing your address, with costs ranging from £8.48 to £25. And six charge between £5 and £20 for duplicate documents.

Five of the insurers (Bradford & Bingley, Endsleigh, Nationwide, the Post Office and Prudential) who had extra charges didn’t show them until after we had got a quote.

We also found that Admiral detailed their fees in a section on their website called ‘legal info’ which was four clicks away from the home page – not the most logical place to look for fees and charges.

On the other hand there was good practice demonstrated by Budget Insurance, Esure, LV and Sheila’s Wheels who clearly labelled the pages showing their fees.

Shedding light on the issue

As part of our Sneaky Fees and Charges campaign we’ve been asking for financial fees and charges to be made upfront, fair and easy to compare.

We’re asking insurance companies to: stop hiding the full cost from customers; stop making it harder to compare prices; and stop stinging customers with rip-off added charges. We also want the regulator to consider whether these fees are really justified at all.


Have you ever had to pay out unexpectedly for admin fees and charges on your insurance?

Comments
Member

All the insurers must be honourable and declared in simple ters about their charges
Present or future.

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Member

These days’ [and I have learnt from experience] before I subscribe to any type of Insurance or any policy with anyone, once I am quoted a fee I then contact and ask are there any underlying fees that they have not openly declared as I do not want to get any surprises when the paperwork arrives.

Member

Once more I can only reiterate ‘these fees are all part and parcel of rip off Britain’. Another of the biggest scammers is Travel Industry, Travel companies want you to book with them yet when you do they then want to charge a booking fee for your accommodation, a booking fee for your fights, if you use a credit card this will entail a percentage fee of your holiday cost ie 2% or 2.5% and this can add up cost wise, they try to have you always, yet what does it actually cost per transaction with credit cards nowhere near what you are being charged. This is where the Government should step in and place a maximum charge on credit card fees because companies will fleece you for as much as they can.

Member

And don’t forget that the travel companies also reap considerable commissions from the hotels, airlines and tour operators for acquiring their customers for them.

There is a cap on credit card processing charges*, and I thought it was 2%, but the charge must also be reasonable in terms of being proportionate to the amount of work and costs involved. Many firms charge the maximum regardless and I cannot believe the processing costs [other than indemnities] are related pro rata to the value of the trade, so 2% might be OK on a low value transaction but when dealing with holidays, which can run into the thousands, 1% might be more reasonable. These things never get tested in the courts unfortunately.

* The charge covers not just the credit card company’s interchange fee [which is capped by the EU at 0.3%] and merchant service charge [each CC company has its own commercial tariff] but also the retailer’s own attributable costs if any, but there is little transparency in how these costs are derived.

Member

In my opinion :-
I object to the practice of some “insurers” ( banks acting as agents actually ) who send by Post “renewal advice letters” designed to arrive AFTER the day and time the 1st “automatic renewal” premium payment is “taken” and then ADD a “third party” financing fee not shown before / carefully hidden for monthly payers. They also practice sending an email “renewal advice” also AFTER 2100 hours on the night before the first payment is taken ! I consider this sharp practice at best, and Santander / aka BISL are the guilty party/ies in my case. They have caught me out two years running with this ploy – 2017 WILL be different !
Also the all too common practice of sending a last-minute email from an email address which is a “Do not reply to” ie outgoing ONLY forcing you to wade through pages of deliberate obfuscation to find a ( usually ) non-working / non-applicable webpage which declares it will “try” to respond maybe within the forseeable future but certainly not in a “Timely” fashion.
This only serves for me as reaffirmation that “Banks” are one of the worst deliberately “criminal” groups currently involved in commerce, and most certainly ones NOT to be trusted.

Member
David Horrocks says:
14 February 2017

I got home insurance with Admiral after using comparethemarket.com but they are now refusing to note my mortgage lender despite my calling them to request this to be done as part of my application. When I rang them after looking at my policy documents they said that they would send an email which stated that since they were established after 2012 they were not bound to do this.

I feel that this is mis-selling of an insurance policy as if I had known/been informed I would not have taken out the policy as it doesn’t comply with my mortgage lender’s requirements. I will now have to cancel and be charged a £25 admin fee…for which basically they have done nothing for me as a customer.

Member

Your mortgage lender will require appropriate cover on the buildings to ensure, in the event of a disaster, its loan is covered by the insuror. Has your mortgage provider told you why it rejects the Admiral policy? Presumably Admiral required to know your mortgage provider, or that the property was mortgaged, when it offered you a policy. It seems strange therefore that it should be selling non-compliant insurance unless your property is out of the ordinary or your mortgage provider has specific non-standard requirements.