People paying for home and contents insurance have been warned to look out for hidden fees that could drive up their bills.
As many as 82% of buildings and contents policies charge extra fees on top of premiums, according to research by insurer NFU Mutual. It found that the most common way customers are made to pay additional costs is when they choose to pay monthly via direct debit.
The research revealed that 75% of buildings and contents insurers ask for more money from those who choose to pay this way rather than in one lump sum, The Mirror reports . And if you’re looking to set up, cancel or just tweak your policy, you may also be hit with extra charges by your provider.
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Cancellation fees are the most common of the three, with 48% of buildings and contents insurance policies charging an average of £30 for customers to leave their provider. Meanwhile, 33% of building insurance policies and 31% of contents insurance policies charge customers who want to make changes to their policy, at an average cost of £18 each.
Joining a provider could also see you face additional costs, with 25% of building insurance policies charging a set-up fee leaving customers out of pocket by £28 on average. When it comes to contents insurance, 28% of policies charge a similar fee.
Even renewing your policy as an existing customer may incur an extra price. 32% of buildings insurance policies and 31% of contents insurance policies were found to charge people for renewal, at an average cost of £30 a piece.
NFU looked at data from financial information Defaqto on 351 contents insurance policies and 320 buildings insurance policies in its research. According to guidance from the Financial Conduct Authority regulator, such charges “must not exceed an amount that is in proportion to the service provided”.
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