The creeping cost of your life admin

Finally. We’re now adding mothers’ details to marriage certificates. The biggest shake-up to the antiquated system since 1837, it’s a critical move that most of us are astonished didn’t happen years ago. But this kind of tweaking isn’t always such a win-win.

When you make a change to an official document, from a car insurance policy to a passport, you could be faced with a pile of onerous paperwork and a range of administrative fees. And some of them are eye-watering.

But is there anything you can do about the creeping cost of life admin?

When you get married, or divorced, or you need to change some personal information on an official document you usually need to tell each company in question as soon as possible.

With a driving licence, for example, while changes are free if you don’t let the DVLA know you could be faced with a £100 fine. On a passport on the other hand, if you want to change your name you’ll have to renew it, at a cost of £75.50.

If the technology now exists for all marriage documents to be on one electronic system, could it not be the case that all official documents are recorded in the same way? Rather than us having to contact multiple institutions, fill in a variety of forms, and often pay a fee for doing so.

Martyn James, spokesperson for Resolver, says: “For far too many years the ‘admin’ fee for making small changes to documents, accounts, and computer systems hasn’t even remotely reflected the actual work required to make the changes.

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“Businesses and official organisations have been able to set arbitrary prices for changing names – from correcting mistakes on booked flights to amending formal documentation.”

There are many examples of the fees involved for making simple changes and one area where it is especially pertinent is in the insurance world.

If we take car insurance as an example, of the 329 comprehensive car insurance policies currently on the market, 225 charge £20 or more for an adjustment to a policy, according to data from Defaqto. That’s 63 per cent of policies where you’ll be expected to pay a fee if you’re making a change to the policy.

Insurers decide how much they charge for making changes to a policy or a customer’s details and they vary hugely. It may be the case that a fee will only be applied if a premium then changes, to cover the work involved with re-evaluating your risk level, and some insurers only apply a fee if a change is made via a call centre.

At Aviva, for example, there are no admin fees if changes are made online, and fees only apply in some circumstances when a premium changes as a result.

LV also said its admin fees are clearly displayed in customer documents and they are only charged if a change is made to a policy.

A spokesperson for LV said: “If a customer wants to make a change to their home or car insurance policy, there is an admin cost of £15 which is in place to cover the cost of making the change to the policy and this is made clear in our customers’ documents. 

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“This cost is only incurred when a car or driver needs to be changed or a customer moves home and all other changes are free to change. Through Covid though, we’ve also been waiving some of these costs for people struggling financially.”

However, one area where fees seem especially painful is if you cancel an insurance policy early. Esure, for example, will charge a customer £60 if they cancel a car insurance policy after the initial 14-day cooling-off period and £26 for changes relating to the policy, payment details, or additional administration of a policy.

The Financial Conduct Authority (FCA) has just completed a consultation into pricing in the insurance industry and its findings, when they are published at the end of May, are expected to cover these additional fees levied to customers.

It says customers need to be informed of any fees they may incur in advance but if you are faced with a fee for making a change, what are your options?

You could refuse to pay the fee, by telling your insurer the reasons why you don’t think it’s fair. If it rejects your claim you could then go to the Financial Ombudsman Service to make a complaint, although if you are found to be in breach of your contract you may have to pay the fee anyway.

If the company isn’t willing to budge, you could also take the decision to leave. Depending on the situation, it may be possible to cancel your existing contract and move elsewhere – or you could at least threaten the company with this action and hope it waives the fee.

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Guy Anker, deputy editor at Money Saving Expert, said: “Insurance admin fees can feel like a rip-off, as they bear no resemblance to the cost to the insurer of making the change. If you’re hit with fees for a name change, or anything else, then remember, insurers are among the easiest firms to haggle with. So simply tell them you’ll leave if they pass on the charge – we get many reports of such fees being cancelled when people do this.

“To really take it to the max you could carry out that threat – the best action you can take is to check what a new policy would cost, as you can often cancel existing policies for a £50-ish admin fee. If it’s much cheaper, then it’s a good time to switch anyway, though ask your current insurer if it’ll match the price – as well as cancelling the admin fee – to save you having to switch.”



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