In this year’s budget the Government increased insurance premium tax, anyone taking out insurance cover should note that after the 1st of November the tax paid by consumers on most types of insurance will go up.
After this date the Insurance Premium Tax (IPT) will rise from its current level of 6% to 9.5%.
IPT is out of insurers’ control
Insurance Premium Tax is a tax that’s outside of the insurance industries’ control and the increase will put up the cost of cover on many of the most types of insurance from November 1st.
Some cover types are exempt
However, some other types of cover, including life and health insurance, are exempt from Insurance Premium Tax. And those taking out travel insurance already pay a higher, separate rate, of 20%, which remains unchanged.
Those with existing cover unaffected until renewal time
If you have existing cover in place the new 9.5% rate will only affect you when you need to renew or take out a new policy.
Average per month increase isn’t huge
Fortunately, the increase in Insurance Premium Tax, while still costly for consumers, shouldn’t mean premiums rise by a great deal in actual pounds and pence for the majority.
The Automobile Association (AA) says the new Insurance Premium Tax rate will add around £18 to the average annual cost of a fully comprehensive car insurance policy. That works out at £1.50 per month.
And when it comes to home insurance, the Association of British Insurers (ABI) has calculated the average policy will go up by £9.48 a year; which is 79p for each month of cover.
Shop around for cover to offset the increase
While the increase in IPT is unavoidable, one of the best ways to offset higher premiums is to shop around for a better deal.
Speak to our friendly experts here at Policy Expert and they’ll help you find out if you could get the same level of cover you already have for a better price elsewhere.
You might be surprised how much you could potentially shave off the cost of your car or home insurance, which could more than make up for the soon-to-arrive hike in IPT.
As an online insurance broker, Policy Expert help our customers to compare insurance products and find a policy that’s right for them. Customer care is at the heart of everything we do and we have a dedicated customer service team on hand by phone, email, twitter and instant chat. For more information speak to one of our experts on 0330 0600 600 or email firstname.lastname@example.org