«Breaking News» Insurance firms rake in £634MILLION from add-on fees

Three of the country’s biggest insurers raked in £634million last year through extra charges.

Direct Line, Hastings and Admiral earned much of this by charging their customers more to pay in monthly instalments.

It also came from add-ons such as breakdown cover and from fees for changing policy details.

Campaigners last night accused the industry of profiting from hard-up motorists unable to pay for insurance up-front – with the elderly and young worst affected.

Direct Line, Hastings and Admiral earned much of this by charging their customers more to pay in monthly instalments. Stock image

Labour MP John Mann, a member of the Treasury select committee, said: ‘This is a huge amount of money being taken from people who are often least able to afford it.’

The £633.5million was 12 per cent more than the insurers earned for the practice in 2017, according to company accounts. 

Admiral made the most, picking up £287.9million in extra charges. Direct Line earned £192million, and Hastings £153.6million.

Much of this came from charging customers more to split their annual home or car insurance bill into monthly payments.

This means they are charged interest as if taking out a loan – but at rates as high as 29.9 per cent, far above those at a high street bank, according to comparison site GoCompare.

These higher costs earned Direct Line £119.9million, Hastings £104million and Admiral £81.4million last year.

Labour MP John Mann, a member of the Treasury select committee, said: ‘This is a huge amount of money being taken from people who are often least able to afford it'

Justin Modray, of consumer group Candid Money, said of the charge: ‘It makes huge profits for the insurers, but as ever it’s at customers’ expense.’

The insurers’ annual accounts showed they also squeeze profit out of customers by demanding more cash for optional extras.

These could include a charge for breakdown cover or an admin fee for changing policy details.

For those who buy through price comparison sites, these fees tend not to be revealed until just before payment is made – meaning customers might end up not getting the cheapest deal.

These charges earned Admiral £206.5million, Direct Line £72.1million and Hastings £49.6million last year.

Spokesmen for the three insurers said their extra fees and interest rates were clearly presented at purchase.

The Association of British Insurers said all firms clearly state add-ons in accordance with regulations from the Financial Conduct Authority.

Link hienalouca.com

https://hienalouca.com/2019/03/11/insurance-firms-rake-in-634million-from-add-on-fees/
Main photo article Three of the country’s biggest insurers raked in £634million last year through extra charges.
Direct Line, Hastings and Admiral earned much of this by charging their customers more to pay in monthly instalments.
It also came from add-ons such as breakdown cover and from fees for changing policy d...

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Dianne Reeves Online news HienaLouca





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