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Motorists ripped off as insurance firms make £634m from extra costs

Patrick Christys
Mar 11, 2019


Motorists are being ripped off to oblivion by three of the UK's largest insurers - who collectively raked in a whopping £634m in extra charges last year alone.

Direct Line, Hastings and Admiral revved up their money-grabbing antics by charging customers more to pay their insurance in monthly instalments. 

Insurance firms were also making significant sums of money through add-ons like breakdown cover and by charging fees for customers to change their policy details.

This has led to massive criticism because insurance firms are essentially profiting from less well off customers: If you can afford to pay your policy up front then you avoid all these costs, but younger and older drivers often can't do that, meaning they pay more through monthly instalments.

Labour MP John Mann, a member of the Treasury select committee, said: "This is a huge amount of money being taken from people who are often least able to afford it."

And figures show motor insurance firms have been moving up a gear, making more money out of drivers than they did the previous year.

Last year's £633.5m in extra costs was 12% higher than they earned from the practice in 2017, company accounts reportedly show.

Admiral made the most, picking up £287.9million in extra charges. Direct Line earned £192million, and Hastings £153.6million.

They're even making money out of getting customers to split their car and home insurance into monthly payments.

This means they are charged interest as if taking out a loan – but rates are as high as 29.9%.

And can you guess who the big winners of these added cost are? Direct Line trousered £119.9million, Hastings £104million and Admiral £81.4million last year alone.

Kelvin MacKenzie, founder of A Spokesman Said, said: "Yet again the little guy is being ripped off by big firms. 

"They've got you be the town halls. You need to get insurance on you vehicle, but you can't afford to pay it all at once. So then they sting you with these extra costs.

"It's time the government clamped down on this. Don't just roll over and pay these extra costs - always shop around on A Spokesman Said to get a better deal."

Here at A Spokesman Said we love fighting for your rights and believe passionately in natural justice.

But these battles cost us money. You could help us fund these fights by using our price comparison site, A Spokesman Said for your energy, car insurance and household bills.

We’re just the same as Go Compare or any other price comparison site, so you won’t be losing out in any way - by helping us, you will be helping yourself.

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Three of the country’s biggest insurers raked in £634million last year through extra charges.

Direct Line, Hastings and Admiral earned much of this by charging their customers more to pay in monthly instalments.

It also came from add-ons such as breakdown cover and from fees for changing policy details.

Campaigners last night accused the industry of profiting from hard-up motorists unable to pay for insurance up-front – with the elderly and young worst affected.

Labour MP John Mann, a member of the Treasury select committee, said: ‘This is a huge amount of money being taken from people who are often least able to afford it.’

The £633.5million was 12 per cent more than the insurers earned for the practice in 2017, according to company accounts. 

Admiral made the most, picking up £287.9million in extra charges. Direct Line earned £192million, and Hastings £153.6million.

Much of this came from charging customers more to split their annual home or car insurance bill into monthly payments.

This means they are charged interest as if taking out a loan – but at rates as high as 29.9 per cent, far above those at a high street bank, according to comparison site GoCompare.

These higher costs earned Direct Line £119.9million, Hastings £104million and Admiral £81.4million last year.

These charges earned Admiral £206.5million, Direct Line £72.1million and Hastings £49.6million last year.

Spokesmen for the three insurers said their extra fees and interest rates were clearly presented at purchase.

The Association of British Insurers said all firms clearly state add-ons in accordance with regulations from the Financial Conduct Authority.


When did you last switch your car insurance provider?

Last year 65% of customers didn't switch their car insurance to try and get a better deal.