Beware the motor insurers’ admin charges

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Motor insurers already have one of the worst reputations in the protection industry.

They notoriously undervalue damaged cars and favour newcomers over loyal customers with higher premiums on renewal.

Now they have taken a further step to boost their profits by introducing underhand administration fees.

Financial researcher Defaqto Matrix discovered that almost 70 per cent of motor insurers raise so called ‘adjustment’ fees up to £50 for changes, even small ones, which is a 56 per cent increase in just five years.

It’s difficult to find the documentary evidence as the required disclosure is often hidden in the small print under ‘terms of business agree- ment’.

To cancel a policy, over 75 per cent of insurers now impose a charge, which can be up to £85. MoreThan, a Royal & Sun Alliance subsidiary, charges £55, as does the AA, Asda and esure.

Administration charges for both commencing and renewing motor cover are also rising. To set up a policy, 11 per cent make a charge.

The AA, for instance, charges £28. Renewal costs of around £20 per policy are levied by some six per cent, up from two per cent in four years.

Adjustment fees of £10-£50 are now common for a home move even if most of the postcode stays the same.

Esure charges £26, John Lewis and the Post Office £20, whilst £25 is raised by the AA, M&S and RAC.

Whilst changing a vehicle may naturally mean a revised rating, the opportunity is again taken to slap on an admin fee.

This can be £15.75 (Tesco), £15.90 (Churchill, Direct Line), £18 (Aviva), £20 (Asda, John Lewis, Post Office), £25 (AA, M&S, RAC) and £26 (esure).

Adding a driver to a policy, seeking a duplicate certificate or asking for continental cover will often incur an adjustment charge.

There are two ways around this ploy.

Either select a motor insurer with no such tactics, notably NFU Mutual, or make the change online if an insurer allows it and without charge.

The others have been caught out and hate the oxygen of publicity.