What sneaky fees are lurking in your home 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.

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.

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.

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.

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.