Motor Insurers reduction in Premiums a cheap trick ñ Stealth Charges seep into Insurance Policies, say Which?

Motor Insurers have recently been lauded by drivers up and down the country for, what was perceived as, a reduction in the cost of premiums, which led to mass savings for households throughout the UK. In actuality, insurance distributors have been sneakily swelling a multitude of motor insurance policy-related costs by up to 200% within the past 3 years, fresh data from consumer group, Which? has shown.
According to the research compiled by Which?, which scrutinised the policies of 40 insurers, almost half have hiked up administrative or cancellation fees since the last time a survey of this nature was taken. The data also entailed certain consumer-orientated measures, which sought to ascertain public opinion on the motor insurance industry. The findings painted a fairly dismal picture, with two thirds of the sample agreeing that insurance companies over complicate the presentation of financial information and charges, with a view to calculatedly confuse their clientele.
Which? executive director, Richard Lloyd said: ìWeíre fed up with being hit with unexpected, additional costs for financial products that lead to us paying more than we bargained for.
“These fees can be hard to avoid, and people often don’t know what they’re really paying for.”
Every motor insurance company, bar Age UK ñ which prides itself on contesting market failure ñ has charged extra fees, with some augmenting existing fees on their policies, and others imposing entirely new costs. Notable insurers such as Churchill and More Than, have increased fees by up to 50% through the amendment of various policies. Whilst new costs created include a £28 charge, to simply initiate a motor insurance policy, levelled at customers by AA. The audacity involved in inflicting such a charge on the most fundamental aspect of motor insurance has left consumer groups and policy-holders seething.
However, what worsens the situation is these price hikes have all occurred on the back of a very public decrease in the supposed cost of motor insurance. Having fallen to a third of the peak cost of motor insurance in 2011, a car insurance policy stands at £579 ñ down by 15% from £678 around a year ago.
Lloyd said: ìWe want the financial services industry to put an end to excessive, unclear and hard to compare fees that do nothing to improve the low level of trust in these markets.î
Hugh Savill, director of regulation of the Association of British Insurers (ABI) defended the industryís conduct, claiming: “Insurers are not interested in hiding any charges from their customers, and follow regulatory requirements so that any additional charges are clearly set out.”
He continued, by means of justification: “Changes in your circumstances, for example changing jobs or moving home, may require the insurer to reassess the risk, and if there is any change the need to prepare and issue new insurance documents. 
If you cancel early then the insurer needs to re coup the costs involved in setting up the policy.”
Consumer Groupís retaliation
The report has spurred Which? to initiate a campaign against motor insurers, whose methods they dub ìsneakyî, that serves to compel insurers across an assortment of sectors, all whose ‘stealth charges’ it considers unworthy and oppressive. 
Named ‘Stop Sneaky Fees and Charges’, the campaign purports to do precisely what it says on the tin, focussing on overdraft charges, mortgage start-up fees and rapidly escalating interest rates on policies, which take customers by surprise due to the poor, seemingly duplicitous financial advice on offer.
So far, the group has discovered a large portion of people have paid fees they themselves deem superfluous on financial products in the last year. Moreover, roughly two in three people agree insurance companies use covertly imposed charges to dupe consumers into a false sense of financial security. 
‘Stop Sneaky Fees and Charges’ calls for added administrative, or other, costs to be displayed in an upfront and toward manner, with the consumer being appropriately informed so as to make the soundest judgement possible. 

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