Four out of five home and contents insurance policies have hidden fees that can push up costs for consumers by hundreds of pounds, research shows.
Insurer NFU Mutual says 82% of buildings and contents policies charge some sort of extra fee on top of the premium itself.
These fees include charges for setting up a policy, paying by direct debit, making tweaks to a policy and more.
For buildings insurance, a quarter (25%) of policies charge a set-up fee, which costs an average of £28.
Around 32% charge a renewal fee for existing customers, at an average cost of £30.
This means a customer could realistically be charged to set up a new policy and then charged again to renew that policy, paying almost £60 over two years.
More common still are adjustment fees, which are charged in a third (33%) of buildings insurance policies and cost £18 on average.
Cancellation fees of around £30 are levelled in almost half – 48% - of policies.
Contents insurance also comes with unexpected costs, hitting freeholders, leaseholders and renters alike.
More than a quarter (28%) of contents insurance policies charge a set-up fee, which typically costs £27.
Almost a third (31%) charge a renewal fee for existing customers, at an average cost of £30.
As with buildings insurance, this means a typical customer who sets up a new policy and then chooses to be loyal to their insurer the next year could have to pay just short of £60 worth of fees over the two years.
Adjustment and cancellation charges are equally common for contents insurance, featuring
in 31% and 48% of policies, respectively.
Cancellation comes with an average charge of £30 and adjustment attracts a typical fee of £18.
But the most common way customers are made to pay extra is by paying more when they elect to pay monthly by direct debit.
Across buildings and contents insurance, 75% of insurers ask for more money if you choose to pay this way, rather than in one lump sum.
Customers can avoid unexpected costs and budget effectively by planning ahead for their insurance needs and reading policy documents carefully
James Daley of Fairer Finance said: "These fees have not been a historically big part of home insurance - unlike car insurance - but in recent years we have started to see more and more major home insurers introducing them."
Some cancellation fees can be as high as £58.
"I don't know how they can justify that," Daley added.
If an insurer or broker charges a fee, guidance from the Financial Conduct Authority (FCA) regulator says this "must not exceed an amount that is in proportion to the service provided" and not be "profit".
NFU, which does not charge hidden fees, looked at data from financial information Defaqto on 351 contents insurance policies and 320 buildings insurance policies.
Fairer Finance research shows that 59% of home insurers still do not charge cancellation fees, and 79% do not charge for amending policies.
Why do insurers charge these fees?
Because insurance is bought by consumers largely based on price.
When we shop around for insurance, it is very often the cheapest policy that we go for.
Insurers know the cheaper a premium seems, the more likely they are to get customers.
Charging hidden fees on top of this is a good way for insurers to get extra cash out of customers while seeming to be cheaper than they really are.
The details of these extra charges are normally tucked away in the small print of insurance policies - which consumers do not always read.
