Over the past year drivers in the UK have seen significant rises in their automobile insurance costs. According to the AA, there has been a 13.4% increase in the average quoted car insurance premiums for comprehensive cover this past year. In addition, there’s been a 19% increase in third party fire and theft cover, which is usually purchased by young drivers.
And now that chancellor George Osborne is searching every nook and cranny for opportunities to fatten the Treasury coffers, the insurance premium tax (IPT) is under close scrutiny.
The current IPT for any insurance product, be it automobile insurance or home coverage, is 5% of the total price. IPT will most likely rise to 10%, which would see most car insurance premiums rise by approximately £ 15 per year. There is some talk that it may rise as much as 17.5%, which would mean that most drivers will be paying about £ 37 more in the coming year for the same amount of insurance cover.
The British Insurance Brokers’ Association feels that such an increase in taxes will be counter-productive, saying, “It will serve only to add further financial pressure during the recession, and discourage individuals from taking out adequate and appropriate insurance protection.”
Consequently, more and more individuals are taking a closer look at the insurance cover that they own and are comparing it to other offers that are available in the marketplace
