Car Insurance Admin Fee

alanaberdeen

I'm changing my car at the end of next week so I phoned my Insurance Co. (One Call Direct) at the end of last week to get quotes on a couple of cars I was looking at.
For both cars I was told there would be a payment of £55 required, but no change of monthly pament. After checking my policy I see they charge £55 for any amendment, but I thought there would be a change in the repayments too, probably less but not sure as its a newer car but a lower insurance group (Group 12 down to group 6), should I ask them if there is a change in payments?
Is the £55 fee a bit steep too?

dunstonh

Is the £55 fee a bit steep too?

Does it matter? you agreed to it when you took it out. it's at the higher end of the typical range you see but unlikely to be classed as unfair.

For both cars I was told there would be a payment of £55 required, but no change of monthly pament.

It is worth checking. They may have only thought you were asking about what the admin fee was or limited their answers to that.

mikey72

dunstonh wrote: »

Does it matter? you agreed to it when you took it out. it's at the higher end of the typical range you see but unlikely to be classed as unfair.

It is worth checking. They may have only thought you were asking about what the admin fee was or limited their answers to that.

Yes it matters. It's past the range that has been considered acceptable.
£50 has been the ceiling, so it's another fiver today, another fiver tomorrow.........
It can be challenged, and referred to the FOS.

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/54/insurance.htm

dunstonh

Yes it matters. It's past the range that has been considered acceptable.

It is one past example the FOS have posted in their publications that was over 5 years ago. We have no idea what other cases they have looked at.

£50 has been the ceiling, so it's another fiver today, another fiver tomorrow.........

What is wrong with that? It is called inflation. It doesnt just affect consumers. It affects businesses as well.

It can be challenged, and referred to the FOS.

The OP does have the right to complain. They can complain that they failed to read the terms they agreed to and challenge if they want. The most likely outcome is that the insurer will reject the complaint but waive the charge or reduce as it is commercially more sensible to do so rather than try and deal with timewasters or troublemakers. They will probably start to lobby for a change in the complaints process to stop firms from being charged large amounts for petty complaints as many firms are already doing.

A valid complaint should always be supported. A petty complaint because of your own failings just reflects society today where you are taught your rights but not your responsibility.

mikey72

dunstonh wrote: »

They will probably start to lobby for a change in the complaints process to stop firms from being charged large amounts for petty complaints as many firms are already doing.

A valid complaint should always be supported. A petty complaint because of your own failings just reflects society today where you are taught your rights but not your responsibility.

That's their right.

But justifying an unfair charge by complaining it's near enough to a fair one, so it's really only a trivial amount over and you shouldn't complain doesn't really hold water.

An insurer has the responsibility to be fair, and claiming that you signed the t&c's, and were caught out so hard luck isn't responsible in society.
It does sadly reflect how insurers expect to treat customers though.
More complaints, not less, would help them to realise their responsibilities shouldn't be ignored.

dunstonh

An insurer has the responsibility to be fair, and claiming that you signed the t&c's, and were caught out so hard luck isn't responsible in society.

Nor is a consumer complaining about a valid and fair t&C just because they didnt read their documentation or understand why it exists.

More complaints, not less, would help them to realise their responsibilities shouldn't be ignored.

More trivial and frivolous complaints make it harder for those with genuine complaints. It just increases the pressure to end the current process which I do believe does need ending as it encourages compensation culture style complaints. It is just so silly that if you get 20 people making identical complaints about the same company and the same thing, the FOS will treat it as 20 different complaints and will investigate each one and charge £500 for each one. If they made one ruling, charged the £500 and then all future complaints on the same basis should refer to that ruling without generating a further £500 charge. They should publish the outcome (which is coming). Then people could complain all they like without a company being at the mercy of compensation culture seeking complaints.

mikey72

If the insurer wants to push for an extra fiver, on top of £50 for changing an address on a computer, or changing a car model, they'll be fine so long as the customer thinks it's a fair price for that amount of work.

Until then, the FOS have published that £50 is ok, so any insurer will have to take a chance on 1 out of 100 to complain if they want to charge more.
If they don't complain they're another £500 up. They're good with statistics, so it must be profitable for them to keep overcharging, or they would accept the £5000, and not try for £5500.

Maybe the insurer shouldn't push the compensation culture so heavily, if they don't like it.
I agree a punative fine would be good for any insurer that actively sold customers details, or harvested referral fees.

dunstonh

If the insurer wants to push for an extra fiver, on top of £50 for changing an address on a computer, or changing a car model, they'll be fine so long as the customer thinks it's a fair price for that amount of work.

What if that £5 extra fee only charged to those that use the call centre for admin results in a £2.50 reduction in premium for everyone? The majority of whom will not use the call centre and create a cost to the insurer. The model does appear to be currently that the companies with the highest admin charges are those with the lowest premiums.

vaio

dunstonh wrote: »

......It is just so silly that if you get 20 people making identical complaints about the same company and the same thing, the FOS will treat it as 20 different complaints and will investigate each one and charge £500 for each one. If they made one ruling, charged the £500 and then all future complaints on the same basis should refer to that ruling without generating a further £500 charge......

Presumably if the company changed their system once the first compliant went against them then the "silly" situation you describe wouldn't arise.

If the company makes the commercial decision to carry on with the same policy even though the FOS has already ruled against them it shows a cynical attitude (probably based on money made from the punters who just pay up compared to the costs of the punters who go to the FOS). This is made even worse by the wrong decision being made initially and then maintained through the internal complaints procedure.

Rather than your suggestion of lower charges for subsequent complaints of a similar nature against the same company, maybe there is an argument for increased charges (and keep increasing them) until the company concerned starts paying attention to the decisions and changes their procedures to reflect this

System

If people do not like the charges applied to a policy, then the best way to persuade that insurer to reduce the charges would be NOT to take out the policy, they will soon get the message that their policy is not competative.

It is ridiculous to agree to a set of T&Cs which include the charges, then complain when the insurer simply applies the charge it said it would.

I do not believe that the FOS complaints process was put in place to cater for people who do not read the T&Cs and then want to submit a complaint of this type, it actually annoys me that so many people think it is okay to agree to something and then complain about it later :mad:

mikey72

It annoys me when companies know the rules, and still try to produce t&c's that openly flaunt them.