How To Reduce Your Car Insurance Administrative Charges?
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Discover the methodologyLet’s be honest. Administrative charges on car insurance policies are a bother.
Insurance providers charge different administrative fees for making simple changes to your personal information or even for cancelling your policy.
So, if you change your job, move house or get married you will have to let your insurer know so that they can update your policy. And most likely, charge you for the cost of a few taps on a computer keyboard by an employee.
But the good news is, we’re here to help you find ways to reduce car insurance admin charges or better yet, not pay them at all.
What charges apply on your car insurance?
The amount of administrative fees charged by insurers can vary significantly and depends upon what you want to change.
Your insurance policy document should mention in detail all the administrative charges applicable to you including cancellation fees.
These are typically the kind of things insurers charge for:
| Administrative charges | Explanation |
|---|---|
| Modification of Personal Information | Getting married and changing your name, workplace, home address and other personal information. |
| Modification of your Policy | If you want to opt for or remove certain add ons such as increasing your annual mileage you may be charged a specific admin fee. |
| Issuing Duplicate Documents | If you lose your policy documents for any reason. |
| Cancellation of your Policy | Depending on whether you cancel within your 14-day cooling off period or after there could be different cancellation charges applicable. |
| Renewal Fees | It’s not common but some insurers might even charge you for renewing your policy. |
| Pay monthly APR fee | You may prefer paying your car insurance on a monthly basis rather than all at once. However, you must know that this comes at a price. It basically means your insurance company will loan you money and charge interest on each monthly installment you will pay. |
Every insurance company has their own set of admin charges but, thanks to technology, some insurers don’t charge you anything if you make changes to your policy information online. In fact, some even have zero admin fees.
Use our online comparison tool to compare the best car insurances with the lowest admin charges.
How much does it cost to make changes to your policy?
Well, It depends.
In fact, we found that out of nearly 400 different comprehensive policies, just over half were subject to policy adjustment fees of around 20 GBP.
Car insurance cancellation could cost you more or nothing at all depending on your insurer. While more than half of all comprehensive policies we found charged an average of 50GBP or more, some didn’t didn’t charge at all.
Which are the best insurers for car insurance low admin fees?
With such a wide disparity between different insurers’ admin fees, it is not easy to know what is a fair price for making changes to your personal information.
We compared admin fees charged by different insurance providers and categorised some of the best and worst.
Here’s what we found:
Compare best insurers for admin fees
| Insurer | Adjustment fee (change of name, address, job) | Duplicate document fee | After cooling off period - cancellation fees | During cooling off period - cancellation fees | Renewal fee | ARP rate |
|---|---|---|---|---|---|---|
 | £0 | £0 | £0 | £0 | £0 | 0% |
 | £0 | £0 | £0 | £0 | £0 | 17,5% |
 | £25 | £0 | £40 | £0 | £0 | 29,90% |
 | £0 online | £0 | £52.5 | £0 | £0 | Varies |
 | £25 | £0 | £50 | £0 | £0 | 23,50% |
 | £15 | £0 | £40 | £0 | £0 | 23,50% |
 | £15 | £15 | £50 | £0 | £0 | 19,50% |
Insurers with highest admin fees
| Insurer | Adjustment fee (change of name, address, job) | Duplicate document fee | After cooling off period - cancellation fees | During cooling off period - cancellation fees | Renewal fee | ARP rate |
|---|---|---|---|---|---|---|
 | £12.5 - £25 | £0 | £30 | £0 - £15 | £28 | 26,90% |
 | £0 online£25 by phone | £0 | £50 | £15 | £20 | 29,90% |
 | £25 | £0 | £50 | £5 | £25 | 26,70% |
 | £25 | £3 | £55 | £25 | £0 | 30,90% |
 | £26 | £0 | £60 | £26 | £0 | 27,90% |
 | £26 | £0 | £60 | £26 | £0 | 27,90% |
From the above table we can see that Age UK is one of the few insurance companies that do not charge at all for any modifications or cancellation of your policy. All the others charge for cancellation at least, even though some companies such as AXA let you make modifications online for free.
It’s important to understand that everything affects the cost of your insurance. For example if you have to change your job and move to a different city, the cost of your car insurance could also be affected based on your change of address and you might find yourself paying an increased premium along with the adjustment fee.
Always compare as many offers as possible. Our online comparison tool is a good place to start.
How can I cancel my car insurance?
To cancel your car insurance policy simply contact your insurance provider and let them know that you want to terminate your policy.
Usually, all insurance cancellation fees and procedures should be clearly mentioned in your policy document. However, these are subject to change and if you’ve had your policy for a few years it might be a good idea to contact your insurer directly and ask them for the exact administrative fees that you would need to pay to cancel your policy.
If you are sure you want to cancel your policy, make sure you follow the cancellation instructions mentioned in your policy document. Some insurers might require you to send a signed letter by registered post whereas a few others let you do it online. If the cancellation procedure is not clearly mentioned, contact your insurer and request them for the necessary details.
If you don’t want the cover to end immediately, you can set a termination date for your policy, or you could also have your policy transferred to another vehicle if the current one has been written off. Make sure you let your insurer know of your intentions before paying the cancellation fee.
It is important to remember that if you cancel your policy before the expiry date, you are most likely to lose your no claims bonus for that year.
What is a cooling-off period?
Think of insurance cooling-off period as your chance to make a U-Turn.
All insurance policies are required to provide a 14-day cooling off period by law, during which time you are allowed to cancel your policy for whatever reason.
This 14-day car insurance cancellation period usually entitles you to a refund of any premiums you might have paid in advance as well as a cancellation fee waiver. However, your insurer can charge for you for the number of days your coverage was active during this period plus an administrative charge.
If you cancel your policy after the cooling-off period you will be charged on a pro rata basis for the number of days your policy was in effect as well as any cancellation or admin fees applicable.
So, how much does it cost to cancel car insurance? To give you a better idea, here are a few examples of insurance cancellation fees during and after the cooling-off period.
| Insurance company | Cancellation fees during cooling-off period | Cancellation fees after cooling-off period |
|---|---|---|
| £0 | £0 |
| £0 | £40 |
| £5 | £50 |
| £15 | £50 |
| £25 | £55 |
While it’s far more common for insurers to charge admin fees even during the 14-day period, it’s not impossible to find a few that offer a full refund with zero admin fees for cancellations within the cooling-off period.
Using an online comparison website to compare and weigh your options is imperative to finding car insurance with no cancellation fee.
Tips to challenge car insurance administrative charges
Insurers are allowed by law to charge admin fees as they see fit, however, according to the Financial Conduct Authority they must be reasonable and reflect the actual cost of administration.
If you think you’ve been charged unfairly for making simple changes to your policy, here’s what you can do:
- Cancel online - While most insurance companies charge a specific cancellation fee, the details of which are mentioned in your policy document, there are now a few insurers that have zero admin fees, especially online. Opting to cancel online could save you some money and time.
- Try to negotiate with your insurer - Never shy away from negotiating with your insurer. It is quite likely that if you’ve been a loyal customer, they would waive or reduce the fee to avoid losing you.
- Final resort: complain to the Financial Ombudsman - If your insurer refuses to reduce or waive your fee after eight weeks of lodging a complaint, you can escalate the matter by lodging a formal complaint with the Financial Ombudsman. A Financial Ombudsman is an independent complaints arbitrator and has the power to ensure the waiver of insurance fees that it sees as unfair either because they weren’t properly explained to the customer, or because they weren’t clearly mentioned in the policy documentation. There have been a number of success stories of fee waivers awarded to customers who challenged unfair admin fees via this route so don’t shy away from questioning any fees you find unfair.
