KwikFit, Axa, Swiftcover and Esure are among the worst car insurance providers for charging extras that can add as much as £100 to drivers’ bills, according to a probe by consumer group Which?
When Which? surveyed 44 insurers, it found that drivers who opt to pay for their insurance monthly with KwikFit are charged fees equal to an APR of around 64%. Endsleigh charged 40%, while Zurich charged 33%.
Drivers who want to obtain a replacement copy of their insurance certificate, who want to adjust their level of cover or cancel their policy can find huge variations in costs from one insurer to the next. Some also sneak in charges for using credit cards.
A small online insurance provider, iGo4, came out worst overall. It says its rates are “market leading” but if drivers want to cancel their policy at any point over the next 12 months the fee is £75. Endsleigh also charges £75, followed by Esure and Sheilas’ Wheels, which charge £55. Older drivers will be pleased to hear that AgeUK came top in the research. It is almost the only insurer in Britain not to charge extra for people who want to pay monthly rather than annually.
Other providers that came out well in the Which? research were NFU Mutual, Volvo car insurance, Volkswagen and Direct Line.
Richard Lloyd of Which? said: “We’ve found some insurers charging customers eye-watering admin fees … We want companies to ensure their fees reflect actual costs and aren’t just a way to squeeze more money from customers.” But while consumer groups want insurers to cut the rip-off fees, the insurers are warning that they are finding many more drivers are being dishonest when they apply for cover.
The Association of British Insurers said that in 2014 insurers uncovered 212,000 attempted dishonest applications for motor insurance, up 18% on 2013 and equivalent to just over 4,000 every week. Common lies exposed include “forgetting” to disclose previous claims or unspent convictions and parents insuring in their name a vehicle being mainly driven by their son or daughter (known as “fronting”).
Car insurance rates are expected to rise over the coming year, major providers are warning, partly due to the rising cost of personal injury claims. Esure, which also owns Sheilas’ Wheels, said last week that car insurance profits fell by 80% in the first half of this year.
Stuart Vann, its chief executive, said: “The claims environment for the motor market continues to deteriorate and as a consequence we will seek to implement further rate increases in the second half of the year.”
