While car insurance companies have come under fire recently for incredibly high premium prices, industry experts recently warned consumers to keep an eye out for hidden fees on their motor car insurance policies.
Car insurance rates increased by a factor of 30 per cent last year, according to some industry estimates. However, motorists have been having to deal with even more financial pain due to a myriad of hidden administration fees charged by insurer.
These administration fees seem innumerable, with consumers being charged for such actions as spreading the cost of payments, paying by credit card, cancelling a policy during the 14 day cooling off period, cancelling before the end of the year, or even for sending out new documents. Official figures show that the charges for these administration fees range from £20 to as much as £50.
However, some insurers are going even further in their use of administrative fees. Industry experts report instances of having to pay 60 per cent of the cost of cover if a policyholder cancels within the first three months of their policy – with the terms of the cancellation fee hidden within reams of small print that few customers may actually have a chance to read.
Insurers say that customers have a duty to read all the small print. However, critics say that charging 60 per cent for three months is tantamount to profiteering
Insurance cover in the current economic climate is an extreme expense, one that precludes consumers from making assumptions about the terms of their policies, experts caution. Set aside the proper amount of time to peruse all the pertinent documents, they say, to avoid such nasty little surprises that a poorly-timed hidden fee can end up being.