Which? slates mid-term fees

Consumer group Which? has criticised insurers for what it calls high charges for mid-term adjustments, with minor changes costing £55. It has demanded charges should be “proportionate and transparent”.

A July 2010 survey of 151 car insurance providers and 180 home insurance providers found seven in ten car insurance providers and one in three home insurance providers charge administration fees for changing details on their policy.

On average, car insurance providers charge customers £21 and home insurers charge £18 for amending details. But young driver specialist I-Kube charges £55, and home insurer Bluefin has a £35 fee.

Which? Money said it was “disappointed” to find some insurers charging £30 for duplicate copies of insurance documents. It also criticised fees of £85 for cancelling insurance.

The Which? Money survey found:

• 105 of 151 car insurance providers charge policy amendment fees.
• 60 out of 180 home insurers charge policy amendment fees.
• Many insurers will calculate the refund based on a system of short-term rates. This means that if you cancel in the third month, you might only get back 50% of the annual premium, 20% after six months, and nothing at all for those who cancel after nine months.
• Two thirds of car insurers and one third of home insurers also charge cancellation fees. Debenhams, Igo4 Insurance, Masterquote and MRL Insurance Direct charge £85 cancellation fees.
• The average cancellation fee for car insurance is £40 and £31 for home.

Which? chief executive, Peter Vicary-Smith said: "Whether it's £30, £55 or an £85 fee, insurance companies are going to have a hard time trying to justify the exorbitant charges they're billing for routine tasks such as changing an address on a policy or providing duplicate policy documents.

"It's about time insurance companies start treating their customers fairly and make administrative charges proportionate and transparent."