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Hidden Admin Costs Raise Price Of Car Insurance |
Written by Mark Skinner
Thursday, 22 May 2008
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Motorists are being hit by large ‘sneak' fees for small administrative tasks on their car insurance policies, according to a study by Uswitch.com . 14 million drivers are paying out further costs to their insurers, even when there is no change to the amount of their premiums, simply for minor paperwork changes. The website estimates that this practice earns insurers £330 million per year. There are some administrative changes which will affect the cost of premiums, such as moving from a safe neighbourhood to a more dangerous one. But consumers are outraged at fees levied solely to cover administrative costs. Current mid-term charges include a fee of £25 for a change of address and £22 for duplicate documents, a price that many feel disproportionately high for the actual amount of work involved. Ashton Berkhauer of Uswitch.com has called for fixed rates across the board so that there is greater transparency: ‘Consumers need to know where they stand and the easiest way to do this is for the amount providers charge to be consistent across the insurance industry. This would make it clearer for consumers.' Budget Insurance have been singled out as the worst insurer for unexpected add on costs, charging a flat fee of £25 for all mid-term changes. This makes them slightly more expensive than More Than who charge between £15 and £25 and Churchill at a £21 flat fee. A spokeswoman for budget claimed: ‘This fee is in line with many of our competitors,' going on to say that their customers are made fully aware of any costs that they may incur through a mid-term policy change. The biggest concern amongst industry experts is the removal of a cap on the limit of fees chargeable. Until recently the Insurance Code of Business Sourcebook had regulations in place to guard against excessive charges but now that those rules are gone insurers can charge whatever they want. This is an especial worry with cancellation fees, which some insurers have fixed as high as £52.50. Consumers should always look closely at the small print of their policies, according to Debra Williams, managing director of price comparison website confused.com: ‘We recommend that everyone checks the terms and conditions carefully to ensure that they are aware of the costs of making any amendments.' Unreasonable charges could lead to people refusing to disclose important information that could affect their policies, with the result that they could invalidate their cover and end up losing even more money when they come to make a claim. As Ashton Berkhauer states: ‘The worst course of action is to do nothing at all - inaccurate details on the policy could make it invalid, leaving you without a leg to stand on if you come to claim.' However, Mr. Berkhauer also recommends taking the insurers on rather than meekly paying up: ‘It's always worth having a conversation with your insurer as some are willing to waive these fees or will at least be open to negotiation.' Article Source: http://www.ArticleBlast.com |
About The Author:
Mark is an author of several articles pertaining to Car Insurance. He is known for his expertise on the subject and on other Business and Finance related articles.
Mark is an author of several articles pertaining to Car Insurance. He is known for his expertise on the subject and on other Business and Finance related articles.
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