Ensure your insurance is the best price for you
CONSUMERS are already starting to see the impact of the most recent rise in insurance premium tax.
The hike, from 10 per cent to 12 per cent, came into effect two weeks ago and, according to the Association of British Insurers, could add just under £50 a year to the average household insurance bill. The ABI reckon that the rise will hit young drivers and those paying high premiums for private medical insurance particularly hard.
Average premiums for a 19-year-old taking out motor insurance could increase by £20.
Meanwhile, those paying for private medical insurance could see their bills increase by £40 a year.
Businesses will be even harder hit with the new 12 per cent rate potentially adding an extra £300 a year to some commercial premiums.
Given that the rate of this tax has doubled over the last two years, the ABI are calling on the Government to freeze the tax and call a halt on any further increases.
Insurance premium tax is payable on most general insurance policies including motor, pet and general household policies, as well as private medical plans.
Most commercial insurance policies taken out by businesses will also be affected by the rise.
James Dalton, director of general insurance policy at the ABI, said: “With a doubling of IPT in just under two years, it is time to call a halt to this raid on the responsible.
“This tax penalises hard working families, as well as businesses, who have done the right thing by taking out insurance to protect against many of life’s uncertainties.
“This latest hike must be the last.
“The next government must freeze this tax, to give hard working households and businesses a break.”
In the meantime, the extra costs incurred mean that each of us will need to make sure that we are shopping around for the best deals when our insurances are due for renewal.
It will become even more important to make sure that we are only renewing all of our insurances on the most competitive terms.
Don’t just accept your renewal notice when it pops through the letterbox – get out there and make sure you’re getting the best deal that you can find.