Administrative Charge

Insurance companies often foresee the need to collect revenue from administrative fees in addition to insurance premiums. Administrative charges are usually incurred when a client needs to cancel or make a change in his policy “mid-term,” or after the beginning of a new policy year.

For example, he or she might be getting married, moving to a new house, buying a new car or having a baby. Unfortunately, these situations will most likely incur an administrative charge that they probably did not expect.

Sometimes you can reduce or avoid these charges by making the change yourself online, but many companies charge a fee no matter how the change is made. There is always the hope that the changes you make to your policy will result in a lower insurance premium to help make up for the administrative charge.