Glossary

Policy fee

A flat charge some insurers add to a new or renewed policy for administrative costs, separate from the premium calculated for your coverage.

Also called: policy issuance fee, administrative fee, underwriting fee

A policy fee is a flat amount an insurer charges per policy, no matter how much coverage you buy. Companies describe it as covering issuing, underwriting and administrative costs. Some charge it only on new business, some at every renewal, and some build the cost into the rate and charge nothing separately. State rules differ on whether it must be disclosed in the quote. It is not a surcharge, which attaches to a risk factor, or an installment fee, which attaches to the payment method.

The fee appears as a line item on the quote, bill or declarations page. It is often treated as fully earned, so it may not be refunded if you cancel, although some states restrict that. Say a company charges a $25 policy fee (hypothetical) and your premium is $1,800: your total is $1,825, and canceling at day 60 returns a prorated share of the premium but possibly not the fee.

When you compare quotes, add the fees to the premium. A low premium with a $75 fee can cost more than a slightly higher one with no fee. Ask for a quote that itemizes every charge and find out whether the fee is refundable. The fees and surcharges guide lists the usual charges, and the premium entry explains the base amount.

Last reviewed October 10, 2026

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Related terms

Installment fee A small charge added to each payment when you pay your premium in monthly or other installments instead of in one lump sum. Surcharge An extra amount added to a premium because of a specific risk factor, claim history or state-required assessment, usually shown apart from the base rate. Premium The price of a policy for its term, set by rebuilding cost, location, claims history, roof, deductible and other rating factors. Declarations page The summary page at the front of a policy listing the insured, the property, policy dates, limits, deductibles, premium, mortgage lender and attached forms. Renewal The insurer's continuation of your policy for another term, usually with a new premium and sometimes with changed deductibles, limits or conditions. Cancellation The ending of a policy before its expiration date, either by the homeowner at any time or by the insurer for reasons the policy and state law allow.

Related guides

Installment fees, policy fees and surcharges on a homeowners policy Which charges beyond the base premium you can avoid, such as installment and card fees, and which you cannot, such as state-mandated surcharges and assessments.