uSwitch.com: LV= to remove unfair administration charges

Ashton Berkhauer, insurance expert at uSwitch.com, the independent online price comparison and switching service, comments on the decision by LV= to remove unfair administration charges for car insurance customers: "Recent research conducted by uSwitch.com has revealed that over 14 million motorists across Britain are being hit with additional fees amounting to £333 million a year, just for amending simple details to their car insurance policy. By rightly acknowledging such ‘mid-term adjustment' fees to be wholly unfair and excessive, LV= customers will now no longer be penalised for informing the insurer of a change in name, address or for amending their level of cover. Previously a charge of up to £15 was applied for these adjustments.

"With the average mid-term adjustment fee currently standing at £22, the insurance industry has, for too long, sacrificed customer value in favour of methods to boost revenue. This move by LV= now gives the insurer a new selling point, yet this was a commonplace feature among direct insurers not so many years ago. We hope that LV= has issued a wake-up call to other insurers that, indeed, old ideas are often the best, and that a precedent has been set which other insurance providers will now follow.

"Although we cannot argue that this is a step in the right direction, LV= could be accused of simply paying lip-service in their commitment to treating customers fairly. If the insurer truly acknowledges such fees to be ‘unfair', then its decision to continue to charge a fee for customers to receive duplicate documentation or to make an adjustment in terms of the vehicle or driver, does seem excessive.

"Consumers need to know where they stand and consistency needs to be enforced across the industry - either these fees are unfair, or they aren't. Currently, making an adjustment to your policy can cost a motorist anything up to £25 and the price for cancelling a policy mid-term can be unlimited. Unfortunately, the FSA's removal of section 2.10 when the ICOB (Insurance Code of Business) was updated to the ICOBS (Insurance Code of Business Sourcebook), means there is currently no regulation in place to control the amount of money the insurance industry can levy for fees and charges. uSwitch.com is determined to continue its campaign for all insurers to treat customers fairly."