Research suggests almost three-quarters of insurers charge admin fees.

British motorists are paying insurers an estimated £593 million in admin fees every year, according to new research published this week. The study combined consumer behaviour with the fees printed in the terms and conditions of insurance policies to reach the staggering conclusion.

Analysis of more than 80 UK car insurance providers by used car marketplace ChooseMyCar.com showed that some charge as much as £70 to make changes to their policy. Although 28 percent of insurers did not make customers pay to change details such as addresses, job titles or names, the average cost across all 86 insurers was £22.50.

According to ChooseMyCar.com, the average British motorist makes around two changes to their policy every three years (0.64 per year). Multiplying that by the number of licence-holders currently in the UK, the company estimates that more than 26 million changes are made to insurance policies every year.

Signing an insurance policy

With an average cost of £22.50 per change, that could mean British drivers are paying a combined total of £592,969,306 for small tweaks to their policies. Of course, that number may not be entirely accurate - not least because not all licence-holders will own cars - but Jess Hartley, the marketing director at ChooseMyCar.com, said the organisation was “shocked” at drivers’ potential expenditure.

“With some people temporarily moving addresses to be with loved ones or making changes to their policy to align with their new driving habits amidst the lockdown, admin fees can be a hidden cost we tend to forget about,” she said. “Whether you’re taking out a new policy or updating your own, our analysis has shown just how much these fees can stack up. While it’s reassuring to see so many providers not charging a fee at all, it’s a surprise to see seven providers that charge £50 or more.

Top view of approved vehicle insurance policy with car key and car toy on wooden desk

"The average admin fee of £22.50 may not seem like much but when we look at all UK drivers making a minor change to their policy each year that figure rapidly stacks up. We were shocked by the multi-million-pound figure these admin fees add up to when we look at UK drivers as a collective.

"The analysis shows how important it is to check the terms and conditions when shopping around for a car insurance provider as you wouldn’t want to be stuck paying £70 to change something as small as your address or occupation.”