Rant about charges for updates to car insurance policy

Bl4ckGryph0n

As said before, when anticipating that changes are required it is worth while taking that into consideration for an insurance policy. Just like I do with my quidco cashback

Ultimately it costs money to have people answer telephones; people, building, IT etc....

I've found Hastings Direct very reasonable and clear and upfront about charges;
Our Fees | Cancelling or Changing Your Policy | Hastings Direct

I was going to say Nationwide as well, but they stopped doing car insurance...Was done by LV anyway but for us used to have a better deal than LV themselves.

273K

This is the impression I get. The fact some insurers are able to absorb the cost suggests £25 does not reflect the true cost of the change, assuming the costs of running a call centre is broadly equal between companies. The credit card charges (even though they take care not to word it this way) tend to be understood as punishments for missed payments, i.e. when you fail to comply with their T&Cs. Whereas here you're being charged for complying with the T&Cs since you have to notify of changes to address/vehicle/convictions/political beliefs/underwear/etc apparently on pain of death voiding your insurance.

Anyway I'm writing to esure to ask them to explain themselves. Maybe I'll get a quid back as they charged me £26, not the "commonly accepted" £25!!

273K

Hm, seems like some companies are changing their stance, as I think I remember arguing with Hastings over being charged for a change a few years ago.

Lee

We had to cancel a policy due to the policy holder passing away and they charged an admin fee for that, quite a lot if i remember right. I thought it was disgraceful.

Astaroth

If you look at the macro level the finances of an insurance company are:

Inbound - premium, investment return, fees (technically premium in personal/SME lines), reinsurance recoveries

Outbound - claims (allocated costs), operating costs (inc unallocated claims costs), marketing, tax and reinsurance premiums

Insurers know that the average customer makes 0.2 claims per year and 1.5 changes etc. For the former they have to build the cost into the premium whereas for the second they have a choice, build it into the up front premium or put it in as a seperate fee.

Its a simple commercial decision which of the two you do, it all gets reported and taxed as premium and so there is little other considerations. Maybe if you think you've a better way of working out whos likely to make more changes you can get more comfortable building it into premiums (in the same way claims are).

Naturally with aggregators where price comparison is easier and encourages buying on price alone many will do what they can to get up the pricing chart as going from 3rd to 2nd increases your chances of securing the business from 10% to 40% despite the difference potentially being under £1.

Breach of contract is dealt with fairly strictly in law in that both english and scottish law doesnt allow punative clauses and so costs must reflect actual (average) losses. Technicaly change of contract does allow close to punative costs given that ultimately its your choice to change your name or not and so you enter into the scenario with your eyes open (though cost of changing your insurance may not be too high up on the decision on if to revert to your maiden name or not upon divorce).

Another way to look of it of cause is if you go with a company that doesnt charge for changes and you make non/less than the 1.5 average, then technically you've overpaid