New shock of unexpected fees: Sneaky hidden extras can add more than £100 a year to motor premiums
- Drivers are being charged for renewing policies or requesting copies of documents
- These sneaky hidden extras can add more than £100 a year to motor premiums
- The average cost of fully comprehensive cover rose 5% to £815 last year
Driver already hammered by rising insurance premiums are facing a new shock of unexpected extra fees for renewing policies or requesting copies of documents.
These sneaky hidden extras can add more than £100 a year to motor premiums.
The average cost of fully comprehensive cover rose five per cent to £815 last year, according to comparison website Confused – and this did not include the addition of these small-print hidden extras.
One of the biggest additional charges being sprung on drivers is a fee for cancelling an insurance policy.
Increase: The average cost of fully comprehensive cover rose five per cent to £815 last year
Drivers have a legal right to cancel during a 14-day cooling off period, which most insurers extend to 30 days.
Anyone cancelling during this term receives a refund – minus a fee to cover any days the policy was in force. But on top of this can be an ‘administrative fee’, typically £25, but in some instances more.
For example, insurer Wise Driving demands £75, while broker Quote Detective takes at least £100 if a policy has started.
Cancellation charges for motor insurance policies average £50 after the 30-day cooling-off period. But if you have an RAC Black Box policy you can end up paying £125 extra to escape its clutches.
And loyalty rarely pays – you can get hit with a levy for simply renewing a policy.
Quote Detective has the cheek to charge 10 per cent of the renewal premium or £100 – whichever is higher. Brightside demands up to 30 per cent of the renewal cost for returning customers while iGO4 can demand a £60 fee.
And iGO4, along with fellow insurer RCIB, has the audacity to also charge customers for the privilege of taking out a policy with them in the first place. They demand £75 and £60 respectively. This is a levy that most drivers might expect to have been built into their initial insurance quote.
Any changes to your personal details – say if you move home or have to get a new driving licence, or if you need to add or remove a named driver, buy a new car, or modify the number of miles you drive in a year – all need to be reported. Making such alterations can lead to further charges.
Quote Detective, Brightside and Drive Wiser all demand £35 if policyholders need to change details. One Call Insurance slaps you with a £39 fee for making such amendments – and £26 on any consequential adjustment to payments.
There also may be charges if you ask for printed copies of documents. The need for duplicate documents might seem anachronistic, but if you are one of the five million British drivers who go to the Continent each year, a valid paper insurance document could be essential.
Most policy providers will provide a copy for free. However, an insurance provider such as Quote Detective charges £25, Go Girl and Post Office Money both demand £20 a copy and insurer Wise Driving requests £15.
While insurers such as Budget and M&S Bank do not charge if a payment fails due to an unexpected banking problem, others do.
Wise Driving and InsurePink charge £20, while iGO4 charges £30 if a direct debit fails, potentially stacking up even greater financial problems for customers for the next month.
And do not be fooled by an insurer boasting they are open and transparent about charges. For example, motor insurance providers such as RAC, the Post Office and Halifax all display a ‘no hidden charges’ advertisement on their websites.
But they may still hit you with additional fees on top of premiums if there are policy changes to make or you decide to leave them. The long list of extra fees is often hidden in the pages of policy documents.
Martyn James of consumer group Resolver says: ‘It does seem unfair that when you are taking out an insurance policy the price that you are quoted might not end up being the one you eventually pay.’
He adds: ‘Burying such small print details in the terms and conditions is fundamentally misleading to the motorist.
‘They are already paying a hefty insurance premium – and there is no reason why insurers cannot remove many of these hidden extras because they could be included within the cost of cover.’
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