Car insurance SHOCK – The hidden charge which could be costing you £50 more a year

Car insurance SHOCK – The hidden charge which could be costing you £50 more a year

Motorists are being warned about ‘adjustment fees’ on their car insurance premium.

These hidden charges are applied to motorists who make changes to their insurance documentation midway through their policy.

Customers who, for example, make alterations such as a change to their phone number, or adding a named driver or update their home address could be charged £50.

Figures compiled by Defaqto for LoveMONEY has revealed that adjustment fees are charged on almost three quarters (73 per cent) of premiums in Britain.

This has increased from 68 per cent in 2015 and has also increased in price as the average adjustment fee was around £20.

Now almost one in three premiums are charged a fee of between £30 and £49 for any adjustments. 

Most insurers of the 323 reviewed that applied an adjustment fee charged between £20 and £29 but five per cent charged over £50.

The analysis claims that adjustment fees are increasing as policymakers look to slash the overall quoted annual cost.

Mike Powell, a consultant at Defaqto, said: “Other changes which affect the risk could see an increase in the premium and also an administration fee being added, so for example, a change in occupation, informing the insurer of a recent motoring conviction or when a young driver passes their test.

“If additional costs are payable, question your provider and ask it to explain how they have calculated the additional cost.”

A spokesperson for the Association of British Insurers, said that insurers have a duty to be upfront and outline any associated costs with an annual insurance premium.

They said: “Motor insurance is an incredibly competitive market.

“It’s always a good idea to shop around to find the best cover that suits your needs – and don’t just buy on price, make sure the policy gives you the cover you would need if you did come to make a claim.”

Matt Oliver at comparison website GoCompare.com says drivers should try and dispute charges that belief are disproportionate.

“If you think you’ve been charged fees that are unfair or disproportionately high complain to the insurer,” he says.

“It may be willing to reduce or waive a fee to keep your custom.

“If you are still unhappy after complaining to the insurer you can take your grievance to the Financial Ombudsman Service who will look at the case and make an independent decision.

Published at Tue, 12 Feb 2019 11:07:00 +0000

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