Which? campaigns on insurers’ hidden fees
by Gill Montia
Story link: Which? campaigns on insurers’ hidden fees
Which? is claiming that some home and car insurers are taking consumers for a ride by charging exorbitant “hidden” fees for basic policy changes and renewals.
The consumer group reviewed the terms and conditions on the websites of 39 car insurers and 34 home insurers only to find that there are often costly fees to make straightforward changes to policies.
AXA and Swiftcover charge a flat fee of £30 to update address details, change a surname on marriage or change a vehicle, while Hastings charges £35 to amend details on a car insurance policy, according to Which?.
Some companies also charge people a fee for renewing their policies: 50plus Insurance Services and Hastings hit consumers with a renewal fee of £10 and £5 respectively, and both also charge a £10 setup fee.
In addition, cancelling cover can prove costly, with Budget Insurance charging up to £75 to cancel a car insurance policy, the research found.
Which? also claims that a number of insurers charge excessive amounts for payment by instalments: Budget Insurance, AXA and Swiftcover all charge between 29.3% and 32.3% interest, depending on the policy, whereas Age UK and First Direct make no extra charges for their monthly payment options.
Finally, the report highlights a lack of detail regarding charges on insurers’ websites, making it near impossible or compare like-for-like.
Which? chief executive, Peter Vicary-Smith, says: “These charges should reflect the real cost to the company and not a way of making easy money from consumers who are already struggling with high and rising insurance premiums.”
He adds: “The new regulator, the Financial Conduct Authority, must ensure that any charges reflect the actual cost incurred by the insurance provider.”
Responding to the Which? story, a spokesperson for swiftcover.com, said: “When it comes to swiftcover.com and ‘hidden charges’, as Which? puts it, they have simply got it wrong. swiftcover.com has always been an online-only insurer, allowing customers to update their policy online whenever they wish, and as often as they need to – without charge. If, however, a policyholder chooses to update their policy by speaking to the help desk, there is an admin charge of up to £30, like with many other insurers.”