Administrative charges on car insurance policies

You might have to pay to change or cancel your car insurance policy - learn about adjustment and cancellation fees, duplicate document charges and more.

Amanda Bathory-Griffiths

Compare and save on your car insurance

Start a quote

Do you know what fees apply to your car insurance?

If you change jobs, move house or upgrade your car, you’ll have to let your insurer know - you risk invalidating your policy if you don’t.

But although updating your details won’t always affect the price of your car insurance policy, your insurer might charge you an admin fee to make the changes.

These fees vary significantly between insurers, but you can find all the admin costs your insurer will charge you in the terms and conditions of your policy.

It’s a good idea to check these before you take out your policy, just in case you do need to change anything within the term of your policy.

Key points

  • Insurers often charge you a fee for changing or cancelling your policy
  • Cancellation fees can still apply during the cooling-off period
  • If you feel you’re being charged too much, you can complain to your insurer and the Financial Ombudsman

Types of admin fees

Your insurer can charge admin fees to process changes to your information.

So, for example, if you moved to a safer area where car theft is rarer, and your insurer decided there was no increase in premium for the change, they could still charge you an admin fee to adjust your policy details.

There’s no set limit on what they can charge you, but it needs to be a reasonable amount.

You could be charged for things like:

  • Updating your address
  • A change of occupation or employment status
  • Getting married and changing your name
  • Cancelling your policy
  • Getting a duplicate of your documents
  • Making modifications to your car
  • Increasing or decreasing your annual mileage
  • Adding or removing an additional driver

If you let your insurance auto-renew you could pay more than you need

Compare car insurance

How much does it cost to make changes to your policy?

We checked Defaqto and found that 198 out of 345 comprehensive car insurance policies were subject to an adjustment fee of £20 or over - that’s just over half.[1]

Your premium could also increase for any policy changes, so then you’d have to pay the increased premium and the fee.

But fees vary from one insurer to the next - the most expensive adjustment fee we found was £90, while others didn’t charge anything at all.

Some insurers let you change your details for free, but only if you do it online - so check if that’s an option before you call up to make a change to your policy.

How much does it cost to cancel your car insurance policy?

You’re entitled to cancel your insurance if you no longer need it - if you sell your car, for instance.

You should receive a pro-rata refund for the time remaining on the policy.

However, the refund can be very small and cancellation fees can wipe it out completely.

When we checked Defaqto, 79% of policies charged a cancellation fee, with 51% charging £50 or more.

Some insurers didn’t charge cancellation fees at all while others were as high as £128.

If you pay for your insurance monthly, simply cancelling your direct debit won’t stop you owing your insurer for your premiums - you need to cancel the policy with your insurer or you’ll still owe the money and could be pursued for an outstanding debt..

If you cancel your policy before its end, it’s worth noting that you won’t get your no-claims bonus for that year.

68% of comprehensive car policies didn't charge a duplicate document fee. Only 22% allowed you to make changes online though

Out of 345 policies on Defaqto[1]

What’s a cooling-off period?

By law, all car insurance policies have a minimum 14-day cooling off period. During this time, you can cancel the policy for any reason.

If you cancel, you should get a refund of any premiums you’ve already paid, but the insurer can charge to cover days when the policy was in force, plus an admin fee.

If you cancel your policy after two weeks, for example, you’d be refunded 50 weeks-worth or premiums, minus any admin fee.

On Defaqto, only 11% of policies offered a full refund if you cancelled within the cooling-off period – although some still charge an admin fee.

It’s far more common for insurers to either charge for the days used or to charge an admin fee, with 35% of policies giving a pro-rata refund or charging an admin fee to cancel.

Over half (53%) of the policies charged pro-rata for the days insured and levied an admin fee on top.

18% charged £30 or more as an admin fee within the cooling-off period - the most expensive charged £120 to cancel.

How to challenge admin fees for car insurance

If you think you’ve been charged an unfair fee, question your insurer about it.

They could reduce or waive the fee, especially if it means they’ll keep you as a customer.

You might also have grounds for complaint if the fees weren’t declared before you took out the policy.

If you’re still unhappy eight weeks after first complaining to the insurer, take your complaint to the Financial Ombudsman which can help you and offer advice.

Car insurance guides and tools

[1]Last checked 27 August 2019

GoCompare uses cookies. By using the website you agree with our use of cookies. Continue Find out how to manage cookies and view our policy here