Go.Compare car insurance says the number of policies that now charge admin fees has risen since this time last year.
The comparison site has reviewed the 332 comprehensive car insurance products in the market in 2023 and compared the admin fees charged today, compared with the same fees charged in the same period in 2022. It found that the number of car insurance products that now charge additional fees for administrative tasks has gone up significantly.
Additionally, it’s been just over a year since the General Insurance Pricing Practices – or GIPP – were introduced in 2022. GIPP, which came into force in January 2022, aimed to stop insurers offering new customers a better deal than those who automatically renew, previously known as the “loyalty penalty”.
Go.Compare had previously estimated that the practice of offering a new driver a better deal than those who renew, costs motorists £1.2bn a year in higher car insurance premiums.**
As of 1 January last year, insurers had to offer new and existing customers the same price for their annual policy, so the price calculated at renewal must not be higher than that offered to a new customer. The rules applied to car, home, van and bike insurance.
In March 2022, two months after the introduction of GIPP, just 34 (10%) of car insurance products charged more than £60 renewal fee but just one year later, this has gone up to 42 13%.
Additionally, the number of car insurance products that do not charge a set-up fee has gone down from 195 in 2022, to 181 in 2023 – a drop of 7%. And the number that charge a set-up fee over £60 has gone up from 39 policies to 59 – over a 50% increase.
Ryan Fulthorpe, GoCompare’s car insurance spokesperson, said on the findings, “GIPP was a huge shift for the insurance industry, ending the so-called “loyalty penalty”, but one year on, we have now seen the number of insurance companies charging increased.
“While this could be due to inflation and other factors, there is a possibility that insurance companies are feeling the pinch from the GIPP rules and have had to look at other ways to recoup these costs.
“With a cost-of-living crisis continuing to impact our monthly outgoings, it’s more important than ever that insurance customers should be looking to compare their renewal price against the rest of the market.
“No one should be paying more than they have to for their insurance and still the best way to ensure you aren’t paying over the odds is to use a comparison site.”