Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, if he will take steps to ensure that administration fees charged by car insurance companies for changes to policies are proportionate to the cost of the policy change.

The Government is determined that insurers should treat customers fairly and firms are required to do so under the Financial Conduct Authority (FCA) rules. These include, amongst other things, requirements to treat customers fairly, and clearly disclose administration fees before they are payable. FCA rules also prevent insurers from profiting from cancellation fees. Specifically, insurers must not use cancellation fees to penalise customers and any fees charged must have been reasonably incurred by the firm.

The Government does not tend to intervene in the level of charges administered by insurance firms as this is ultimately a matter of their commercial judgment. However, if an individual feels that they have not been treated fairly and would like to complain about a particular type of insurance practice, they can contact the FCA through their consumer support service.