In most cases the fees will be hidden in the final premium offered
and it will be very hard to work out the break down. In fact, it might
not even be important to calculate them down to a penny. General
understanding of it may serve the purpose for most motorists.
Like any other contracts auto insurance arrangement would have fees that a customer has to pay. Knowing these fees would help you reduce them or avoid them completely. The typical fees are billing fees, credit facility charges, broker payments, adjustment costs and cancellation charges.
Normally an insurance policy is arranged over 12 months. When you pay the premium in advance you might get further discounts on the rate or at least avoid any fees or credit charges associated with the monthly collection of it. Only few companies would allow you to pay for the coverage in installments without any extra cost. Most auto insurance companies charge billing fees or interest on the credit facility offered.
Furthermore, whenever you make adjustments to your policy you might be charged a handling fee or additional premiums. Some firms would be easy on these charges and let you make the changes with minor premium adjustments. It is not in the best interest of companies to try to use this adjustments as a chance to get a little bit more money. This is not the case in most situations and many insurers actually observe some of the costs for the sake of keeping the customer happy.
Especially if you want to get these changes done by a broker they might see this as an extra service and require handling fees. Other than that you might incur broker fees when you are buying the policy through an agent. Most people might understand that they need to pay for the expertise they are seeking in a consultant. However, these additional costs must be disclosed clearly and openly.
Essentially a motorist should know all the fees and charges by an insurer or agent so that he could make an informed choice. Every consumer assesses their position differently and come up with a solution. Some might go for the maximum savings but others would like to have it their way even it means slightly more premium.