Ensuring you get a good deal

It’s that time of year for a lot of people, when the direct mail shots land, and the reminder emails drop into the inbox. Yes, it’s insurance renewal season for annual housing and motoring policies, with companies promising to reduce your premiums if you switch, or others offering better and shinier coverage.

But it’s always worth reading the very small print.

Did you know that four of Britain’s biggest insurance firms are making themselves more than £800 million a year by selling “extras” to their customers? Extras like legal or breakdown cover which could be found much cheaper elsewhere?

Then there’s the high fees asked when you want to change details on policies and charging more when drivers and homeowners pay in monthly instalments.

Indeed the UK’s biggest motor insurer, Admiral, says in its annual accounts that these extras and add-ons bring in £64 for every vehicle. Hastings Direct, Esure and Direct Line also reveal in their 2017 accounts how much they rake in from add-ons and fees, and taken together they collect a total of £806m.

And let’s face it, the industry-wide figure is likely to be far higher because other insurers are less transparent.

It’s all because insurers are fighting a fierce battle to appear at the top of comparison site listings and win car and home insurance business.

So while headline prices appear low, if you make any minor changes to your details (such as getting married or moving house), choose to pay monthly or even cancel your policy, you could find yourself hit with hefty charges later on.

It’s inevitable that many customers’ circumstances will change, and the costs of updating their details on an insurer’s system shouldn’t be an opportunity for the company to extract further profit from you. After all if you don’t let them know of changes your insurance could become invalid.

Administration fees can also be whacked on top for paying by credit card or getting a copy of a document if you’ve misplaced the original.

It all adds up to a rip off. At the very least all fees should

be clear at the outset and available on insurers’ websites, not just when documents are sent out.

Car and home insurance costs enough without insurers and brokers squeezing every last penny out of customers by hiding extra charges for minor changes.

■ Remember and send me your consumer questions to askalex@which.co.uk