Insurance providers charging “eye watering” fees
17/08/2015
New research from consumer watchdog Which? has found a large variation in fees car insurance companies charge, with some “eye watering” fees totalling more than double the industry average.
As part of their campaign to “stop sneaking fees and charges”, Which? compared different types of administration fees used by car insurance providers. They looked at 44 insurers altogether and found:
• IGO4 Insurance charges £35 in adjustment fees- over £10 more than the average (£22.79).
• 30 of the insurers charge for cancelling during the 14 day cooling-off period, with the highest charges from IGO4 (£75) and LV= (£40).
• While Age UK, NFU Mutual, Volkswagen and Volvo don’t charge any cancellation fees for ending the policy early, the average cost is £49.55 and three insurers – Budget, Endsleigh, and IGO4 – all charge £75.
• Four insurers charge set-up and renewal fees, to pay for the cost of arranging cover.
• The average charge for sending out a replacement insurance certificate or a copy of the policy document is £14.18, but Axa and Swiftcover both charge £30.
• Kwik-Fit has the highest fees for paying your car insurance monthly, charging a fee of £35 plus a variable interest rate, which are combined to create an APR.
Which? has now called for the companies with the largest fees to justify why they are charging such a large amount. They believe charges involved in setting up, amending or duplicating any type of insurance policy should cost the customer no more than the cost to the company.
Which? executive director, Richard Lloyd, said:
“We’ve found some insurers charging customers eye-watering admin fees that can be hard to avoid, and people often don’t know what they are actually paying for. We want companies to ensure their fees reflect actual costs and aren’t just a way to squeeze more money from customers.”
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