Admin fees

Lynney61

How can insurance companies justify charging £25 for a brief phone call to update a policy? I changed my car recently & felt aggrieved about this payment. 

paddyandstumpy

Do you think the staff member who answered the phone was a volunteer? 

Or the phone they answered was donated free to the insurer? 

Or the number you called didn't cost anything to run? 

Or the office the staff member was sitting in was rent free?
And didn't require heating, or electricity?
And the computer the staff member used was given free to the insurer? 

Or the system used to record your details (and upload them to the MID) was free to run?


All told, I think a £25 admin fee is both fair and reasonable. 

Fair as it's explicitly charged to the customers who cause the admin. Reasonable, given the expenses the insurer incurred. 

Hasbeen

Lynney61 said:

How can insurance companies justify charging £25 for a brief phone call to update a policy? I changed my car recently & felt aggrieved about this payment. 

As you agreed to this through the terms and conditions that you obviously read and understood ? at the policy start.

I am surprised that you now feel aggrieved?

£25 is cheap compared to some. LOL.

daveyjp

All in the T&Cs when you accepted the cheapest quote.

dunstonh

Lynney61 said:

How can insurance companies justify charging £25 for a brief phone call to update a policy? I changed my car recently & felt aggrieved about this payment. 

Not a problem.  Next time, when your policy is due for renewal, pick an insurer/provider that hasn't stripped admin charges out of the premium and go with one that increases the premium for everyone but has no admin fees.    You will pay more every year as you are covering the costs of all those that phone up, even when you haven't, but you will no longer feel aggrieved paying for work you have created.          

sheramber

use a company that do not charge for online changes. 
I changed my car with no admin charge.
There was no admin charge either when I changed address.

Sandtree

There are two models:

1) All operation costs are included in the initial premium and no fees charged to anyone that makes a change

2) Not all operation costs are included in the initial premium and a fee on use charge is introduced

Insurers are clear up front which of the two models they follow and its up to you to decide which you prefer. In many cases, but not all, the cheaper insurers are the ones with admin fees. Generally regulators prefer the idea that people pay for what they use rather than making everyone pay extra. 

As others have said, insurance companies are not staffed by volunteers nor are their offices and IT donated to them. The salary of the operator taking the call is only one component of the total cost.