Are Insurance Companies Picking Your Pocket with Installment Fees?
Lately, California’s auto insurers have been slipping unjustified service fees onto bills – even when policyholders don’t use the service.
Take the “installment fee” or “finance charge” for example. Nearly all the big auto insurance outfits in California -- Auto Club, GEICO, State Farm, Mercury, Progressive, 21st Century -- charge these fees to policyholders who pay their premium in parts, instead of in full at the beginning of a six month or one year policy term. The fee is charged per payment and can either be a flat fee (“installment fee”) or a percentage of the unpaid premium (“finance charge”). They average about $5 per payment.
Insurers are allowed to charge these fees. In fact, it has become industry standard. As we predicted in 2007, however, we’ve seen abuse of these fees crop up everywhere.
Insurers have begun charging these installment fees to people who pay their premiums in full at the beginning of a policy term. We’re seeing a disturbing billing trend where installment fees are added to the total premium amount that is due for the entire term, so even savvy consumers who take steps to avoid the fees get duped into paying.
Have you been unfairly hit with an installment fee? Click here to tell us your story.
8/24/2016News ReleaseConsumer Watchdog Blocks Commerce West 12% Auto Insurance Rate Hike Proposal; Policyholders Save Over $8.2 MillionSanta Monica, CA – Following Consumer Watchdog's petition for a hearing on Commerce West's application to increase... More >
1/9/2015News ReleaseCourt Tentatively Upholds Prop 103 Rule Prohibiting Auto Insurance Companies From Making Consumers Pay For “Branding” Advertising Such as Sporting Event Sponsorships and Naming RightsSacramento, CA – In a tentative ruling today, the Sacramento Superior Court rejected an insurance industry attack on... More >
1/12/2015News ReleaseSanta Monica, CA – Mercury Insurance has been ordered by the California Insurance Commissioner to pay a historic $27.5... More >
1/21/2015News ReleaseSacramento, CA – The Sacramento Superior Court has rejected an attack by Mercury and other insurance companies on state... More >
10/28/2015News ReleaseSanta Monica, CA – California is the only state in the nation where auto insurance premiums, in real dollars, are lower... More >