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Hidden fees are increasing the cost of car cover

When buying motor insurance, you need to look at all the fees and charges, not just the quote price.
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If you need to change a detail on your car insurance you could be slapped with a £30 charge. Insurers say the fee is to cover admin costs, but with the price varying between different firms, the evidence shows they seem to charge what they like.

If you want to change your name – if you've just got married, for instance – Swiftcover would charge you £30 to make the alteration. But at Aviva and the Co-op, the change would be free.

Confusingly, Swiftcover will make no charge if a policyholder changes the details themselves online. That suggests the Axa-owned insurer thinks it's fair to charge £30 for a few seconds' work by one of its staff.

Meanwhile Direct Line charges £15.90, More Than £25 and Esure £26.

If you need to notify your insurer of a change of address the charges are even more puzzling. Swiftcover, Esure, More Than and Direct Line all charge the same amount again. Aviva charges £19.08, but it's free if you do it yourself online.

At the Co-op a change of address – or any other personal detail – is free. But it racks up the charges if you change the policy details, such as by adding another driver or changing the vehicle.

The Co-Op's Nuala Ryan said: "Our practice is to apply a charge that fairly reflects the additional costs involved in amending a policy rather than as a source of additional income." The insurer charges £15 "to cover administration costs".

Are the charges fair? Yes, said Asia Yasir of Direct Line. "The admin fee is to cover the costs associated with making the changes to a policy. For example, if you were to change car, then we will have to re-assess the risk of your vehicle, collect the additional premium via the bank or credit card, then print, pack and post a new schedule and a new certificate of insurance. This is on top of the time taken for the person to collect and enter the new information."

Peter Vicary-Smith, the chief executive of Which? disagrees. "It's a disgrace that insurers charge exorbitant fees to make basic changes. The charges should reflect the real cost and not be a way of making easy money from consumers who are already struggling with high and rising insurance premiums."

The consumer organisation has accused insurers of taking consumers for a ride with the hidden fees for basic policy changes and renewals. "We want insurance companies to be clearer about the fees that they charge and stop hiding the details away in pages of terms and conditions," Mr Vicary-Smith said.

Such charges should be made clear when people buy motor cover. An extra £30 for every personal detail changed, for instance, could turn a cheap insurance deal into a much more expensive one. It's only by knowing all the costs that people can make a fair comparison between rival policies, rather than simply buying what appears to be cheapest.

Finally a word of warning from Lee Griffin of Gocompare.com: don't be tempted to avoid the fee by not telling your insurer about a change. "If you don't tell them and have to make a claim, the insurer may refuse to pay out on the grounds that you didn't inform them of a change."