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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?


I am a bit mystified by the charges for change of address for home insurance. I assumed that the overwhelming majority of these policies were for the residential address of the person buying the insurance. If there is a change of address there would probably be a need for a change in the premium as the risk profile would be different. Obviously there are a number of policyholders who are insuring a second home, or a property they are renting out, or an elderly relative’s property perhaps, as well as people who are buying buildings insurance [with effect from exchange of contracts] for a property they are in the process of purchasing. In the first three of those example I would consider a proportionate administration charge for changing the policyholder’s address to be reasonable; in the fourth example I do not consider it would be reasonable because the insured property is likely to become the policyholder’s new address.

I can alter my address on-line free of charge for any number of accounts that I hold with companies so why should there not be a similar process for changing one’s address on an insurance policy? We all know that an elderly gentleman in a brown coat no longer has to go down the safe in the basement and bring up a huge ledger for a clerk who is sitting with quill pen in hand waiting to write a new line in the book. You wouldn’t know it sometimes from their literature but insurance companies are mainly computer-driven these days.

On a recent insurance comparison exercise I found that Saga did not make a charge for payment by credit card and that you can easily opt out of auto-renewal.

I certainly agree that all fees and charges, and the circumstances in which they are applicable, should be declared openly in the application process. It is curious that insurance companies have always been punctilious in requiring policyholders to abide by the principle of uberrimae fidei [the doctrine of utmost good faith] with full disclosure of any facts or circumstances that could in any way affect the risks being borne by the insurer, default from which can void or limit the policy. But when it comes to their own conduct it seems that some insurance companies are less than open in their disclosure of relevant information that could make the difference between a policy being suitable or not. This is dishonourable. I would also have considered it a dubious practice in the context of the Unfair Terms in Consumer Contracts Regulations 1999.

Well said, John Ward. I particularly appreciated your comments about insurance companies being dishonourable.

CIS, my building & contents insurer has doubled my excess fee from £50 to £100 without informing me or for any apparent reason. I’ve yet to confront them about it, but if they don’t agree to reduce it back to £50 I’ll tell them I’ll reconsider when it’s time for renewal.

I think compulsory excesses have had to rise in line with the costs of rebuilding or of replacing contents. The alternative would have been large hikes in premiums. However, this material alteration in your cover and the policy terms and conditions should have been prominently brought to your attention with the renewal notice. As a matter of interest, how did you find out about the change?

As a retired Insurance Broker having spent over 40 working years in the industry I would comment that many of the so called ‘insurers’ are in fact Insurance Agents and as such are remunerated by the insurers with whom they place the business. These does mean that when a change to the policy does take place which reduces the premium, they do have to refund part of the commission taken accordingly. To then charge a fee for ‘administration’ for these changes can sometimes result in an increase in the cost of the policy!
I do feel that a ‘handling’ charge can be justifiable, but not to the extent that some are levied, due to the very administration costs applying in comparison to commission received. This practice of charging started many, many years ago in the Lloyd’s insurance market place.

Yes, Harry, but the computer has replaced the quill pen now and there are ways of making minor administrative changes at very little cost. They really ought to be part of the service and not charged as extras.

A.D.Hyde. says:
22 November 2015

When a claim is submitted the first reply is You are not covered for that! In this case reade out to them some of the ‘jargon’ and ask for an english translation. This process often produces a result. ADH

Hi there insurance well what can l say ? Insurance is like a hospital gown you do not know what’s covered? Plumbers mate#####,

william says:
22 November 2015

rob the poor give the rich every body getts ripped off sooner l orf later ripof briaton right evrey day bye dont worry

I purchsed a replacement vehicle in March last year. I started my insurance from the date of the purchase. I told the insurers I would be changing the number plate as soon as I had heard from DVLA. They told me I would have to pay an Admin fee of £25 as a change to the policy. I tried to argue that I was telling them now so they could take account of it but they insisted I would have to pay. It tried to reason that as soon as I heard from DVLA I would contact them. But no chance. All they had to do was press a few buttons on the keyboard and email me the change. Say 30 seconds work? This makes me so angry with Car (and doubtless other types of )insurance.

Ask Nationwide why it is that in spite of advertising a £30 discount when taking out their motor insurance having a Flex account it doesn’t happen and they ignore emails on this subject?

I would like the law to insist that any insurance company having information, which you may have forgotten to disclose or are not even aware of, must accept liability for your driving (literally) uninsured, with intent to defraud. They must also be liable for any losses of any nature where such prior or previously available
information via clauses which they only use after the event, with intent to defraud clients of their legal rights.

Peter says:
24 November 2015

insurers are a big mafia
biggest scammers in the world – they do everything to rip us off

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

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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.

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.

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.

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.

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.

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.