Motorists may or may not be aware that many insurance companies charge a range of administration fees such as when setting up a car insurance policy or if someone wants to make certain changes to their policy. Research by the price comparison website GoCompare has revealed that such fees have been increasing over the years – in some cases by quite a big rise.
For instance, between June 2012 and June 2019, cancellation fees have gone up by an average of 49% . If you cancel your policy after the 14-day cooling-off period and during the term of the policy then the insurer can charge a cancellation fee. The number of insurers charging such a fee has increased from 74% in 2012 to 79% in 2019. The average fee has risen from £40.95 to £60.85.
A small number of insurers charge a fee for setting up the policy. In 2012, 12% of insurers did this but this has gone up to 38% in 2019. We are sure that you will agree this is a large percentage increase. The average setting up fee has risen from £20.66 to £37.63 between 2012 and 2019.
If you make an amendment to the policy such as adding a named driver, changing your occupation or address then you may have to pay an adjustment fee. In 2012, 67% of insurers charged such a fee but by 2019 this had risen to 73%. The average fee has gone up from £20.51 to £28.25 in that seven year period.
If you want a copy of your policy then there has been a drop in the number of insurers charging a fee. For instance, in June 2012, 43% of insurance companies charged such a fee whereas, in June 2019, 35% of insurers made such a charge. The average fee has fallen from £18.58 to £13.85.
In view of the above, you may wish to check the terms and conditions of the policy before taking it out to look at these sorts of fees. If you are likely to be going to make a change to your policy during its term then these fees may have a bearing upon whether you take out the cover with a particular insurer.
Of course, you may also wish to compare the cost of covering your car by using the likes of a price comparison website to try to get a competitive deal on your car insurance whether you are looking for cover to insure your first car or whether your existing cover is shortly due to be renewed. Nowadays, there are dozens of providers of car insurance but do be aware that not all insurance companies advertise their products on price comparison websites.
