I’ve been charged insurance admin fees for changing some personal details. Is this legal?

insurance admin fee

You’re not alone to be infuriated by insurers charging on top of your premium for extra services. Insurance admin fees are one of the bugbears for the modern driver and in recent research by insurer Cuvva, nearly a fifth (18%) say they’ve been hit by hidden fees. Here’s what you need to know.

What do hidden fees cover?

Of the one in five who’ve had to pay hidden insurance admin fees, more than a third (36%) say they’ve been landed with adjustment charges. These are when you have to alter your personal details midway through the term of your cover. You might have moved house or changed your car, jobs or name. Whatever, the insurer will still charge you for telling them.

They will also charge you if you have to cancel your policy, no matter how good the reason. You might have got a company car and no longer need your car, or you might be ringing on behalf of a deceased relative. Either way, there’s a good chance the insurer will make you pay.

Insurers also charge add-ons these days. Years ago, features like driving other cars were included as standard in insurance policies. Now, so they can charge the most competitive price possible for their policies, insurers strip their premiums to the bone. You buy the most basic cover possible, then build it back up with add-ons.

How much are these fees?

Comparison site GoCompare checked Defaqto and found that 63% of 363 comprehensive motor insurance policies had an adjustment fee of £20 or more. According to Defaqto, 81% of policies charged a cancellation fee with half charging £40 or more.

insurance admin fee
This Toyota MR2-based fake Ferrari is such a thing of beauty, we thought we’d show it from different angles (Both pictures©APU)

Are hidden fees legal?

The trouble with hidden fees is, they’re only hidden because they’re submerged under a heap of small print. If you bother to read through that small print – and let’s face it who can hand on heart say they do? – you’ll find the fees squirrelled away. So yes, they are legal.

Are hidden fees fair?

You might argue that they’re disproportionate. After all, ring a call centre and say you’ve changed your name from Miss Brown to Mrs Smith and it’ll take them a couple of keyboard strokes to alter your policy. It hardly seems right that they then charge you £35 for the privilege.

What’s even more frustrating is that if you don’t tell your insurer that you’ve changed some of your personal details and you have to make a claim, it can punish you by not paying out. This is because all insurance is calculated on risk. And if you move house or get a different job, your risk profile changes.

What’s the answer?

When you take out insurance, check if there are any extra costs. It’s also worth checking if you can get round admin costs by doing it yourself. Some companies don’t charge if you do your own updates using your account on their website. However, according to Defaqto again, less than a third (29%) let you make changes online. But be careful: some crafty companies let you make changes online and still charge you for the privilege. The cheek of it!

Share this post