Can insurance companies charge a 'policy fee'?
Insurance Policy fees Yes, most insurance contracts have a state approved associated policy fee and in the USA several other government mandated fees and taxes imposed by law that the insuring company must collect for your state.
State mandated fees include state run vehicle anti theft programs, various fire prevention funds, storm preparedness, youth fire hazard education programs carried out in schools and more. Most states have various fees that are required on every insurance policy issued in the state.
You can always refuse to pay the associated fees. but of course, since most of them are required by law, it won't do much good because the company would simply have to decline your application for coverage. It would be illegal for the insurance company not to collect fees that are mandated by law.
Every Insurance Company in the USA is required by law to provide full disclosure of all fees and taxes. They are always disclosed as required by law in every US State and are not additional to the price quoted. The price the company quotes you already has any and all fees included so they are not added at some other time. If the Insurance company chose not to assign the policy fee, then those production costs would have to be factored into the per unit of coverage cost which would result in a higher premium for individuals.
Unfortunately, yes they can. However, you can change ins. companies and ask prior that you get an agreement in writing stating all charges and clearly indicates there will never be any "add-on" charges at a later date such as a policy fee.
The insurance rate (the cost per unit of insurance) translates to a premium by multiplying that rate times the number of units purchased (for example, per $100 of coverage). In most states and for most types of insurance, the insurance regulator is required to approve the insurance rate to ensure that it is adequate (to compensate it for the risk assumed) and neither excessive, inadequate, nor unfairly discriminatory. A policy fee proposed to be charged by the insurer will be reviewed by the regulator to make sure that it is reasonable and does not violate the excessive, inadequate, or unfairly discriminatory rule.