How to Understand an Insurance Policy Fee

Understand an Insurance Policy Fee

How to Understand an Insurance Policy Fee. Insurance buyers are often tricked into paying additional charges by insurance companies or agents. Usually you assume that your insurance policy is issued free of cost in this competitive market place. Chances are, you may be wrong. Some insurance companies in a few states charge a fee for issuing or renewing an auto insurance policy, known as a "policy fee." How do you know whether or not your insurance company will charge you a policy fee? Here are some tips.

Advertisement

Step 1

Ask specifically if the company charges a "'policy fee" while requesting a quote from an agent. Most companies charge this one-time, non-refundable fee. However, if you are an alert buyer, you may be able to ensure that no policy fee is charged.

Video of the Day

Step 2

Request a quote with no add-ons for file processing and handling. Usually, companies pay agents a good commission on every insured file. The policy fee helps set-off these commissions.

Advertisement

Step 3

Contact the company directly and let a representative know you are not willing to pay the policy fee. They will most likely suggest how you can avoid it.

Step 4

Choose quotes from companies that do not impose this fee.

Advertisement

Advertisement

Step 5

If the policy fee is charged, get that in writing from the company. Ask the agent to write down the exact cost and that there will be no additional charge later on.

Step 6

Ask if there is a policy fee charged for renewal. If yes, get the exact cost in writing.

Tip

Do not expect your agent or company to inform you regarding the policy fee. Make a habit of asking this at the time of requesting a quote. A policy fee is levied one time only. Do not loose a good insurance company with great benefits, coverage and services over a small fee.

Warning

Sometimes policy fees are levied under different names such as "application fee," "processing fee," "surcharge fee" or "admin expense." Look out for such terms.

Video of the Day

Advertisement

Advertisement

Report an Issue

screenshot of the current page

Screenshot loading...