Normally, motorists see the final amount quoted and many of them may not care about the fees or other charges included. If they are one off charges it may not matter as long as the policy is still competitive. However, some fees may be charged each time you make changes to your policy or take another action like cancellation. Fees may be charged by the insurer or the broker for their time. Depending on who adds them you may decide to take different action.
Car insurance policies may have various fees like most other financial transactions. These could be billing fees, credit facility charges and interests, policy amendment and adjustment charges and cancellations fees. In general they would be small amounts but some of them may still be annoying.
Packaging Fees: Some underwriters allow their policies to be packaged by a third party like a brokerage firm. This allows the insurer reduce costs and brokerage firm to come up with tailor-made policies for their client base. Such brokerage would be allowed to charge administration fees on top of the rates set in agreement with the underwriters.
This arrangement would not raise any concern if the packaging fees are one off. But it would be a problem if handling fees are charged each time they help policyholders out. Finding out that you are charged a fee for changing your address would probably leave a bad taste in your mouth no matter who pockets the money. This could be a good reason to switch insurers or brokers.
Being charged by a broker for contacting the insurer on your behalf may not be acceptable considering they get paid commissions by the insurers. At least they need to be open and upfront about it. This does not mean that it is acceptable to put a disclosure of charges in small letter in somewhere in the policy where you would never look.
Amendment Charges: Quite a few auto insurers may observe policy amendment costs and may even withhold asking for additional premium if renewal is close. Policyholders should be able to make changes to their policies as required without the worry of additional costs imposed. However, there may be additional premium payments.
Some companies may do it the other way round. For example, they may include the installment arrangement fees in their quotes. But they may offer savings to policyholders who don’t need credit facility and pay upfront and in full. This amount can be as much as five percent. Some companies can use both interest charges and discounts for full payment in the same time. Depending on your payment choice the premium costs would go up or down.
Cancellation Fees: Some companies may waive any charges if a proper notice has been given before cancellation. Auto insurance policies are contracts and breaking them can have small penalties. You should check them before making plans to switch to other carriers. It may not matter that you are charged small amount if you are getting large discounts somewhere else.
It is important to check if there are additional fees for buying policies through a broker or intermediary in addition to the commissions they receive. As long as you know beforehand and accept the position you will have no further issues. Then, you would have choices as to buy the policy direct online or call the company. It wouldn’t be surprising to see some companies are being cheeky and trying to slide fees past you.
Intermediary services have important part in the sale of auto insurance products. Some of them go far beyond the call of duty to help their customers and others use every opportunity to make a little more money. That is why it is essential to work with ethical and reputable brokerage firms and agents. Recommendations are a good way of finding reliable firms and should be sought where possible.
You can check the possible fees and further charges especially when you cannot make a choice between two similar providers. They will have to tell you if there are additional costs down the road. Even though they may not me large sums in most cases, it would be nice to know that each time you contact your insurer or broker they aren’t trying to make money from you.