All Car Insurance And Home Insurance Costs Could Rise
Published: 12 June 2010 By MoneyHighStreet Staff Leave a Comment
Concern is rising that the Government will increase the Insurance Premium Tax, levied on most insurance cover including home and car insurance, in the emergency Budget, causing insurance costs to rise.
Currently IPT is charged at 5% on all car and home insurance (contents and buildings) policies.
It’s charged at 17.5% on all travel insurance policies too but there is no IPT charged on Life Insurance policies.
But as the Government tries to reduce the financial debt of the country, IPT on such as car and home insurance could be doubled to 10% or rise even further.
According to the AA’s British Insurance Premium Index, the average cost of car insurance is currently just under £583 with an extra £29 added for IPT. If the tax rose by 10%, it would add almost £60 to the average policy cost.
The worry is that insurance premiums are predicted to rise significantly over the next year anyway. Increasing IPT might be the ‘straw that breaks the camels back’ and means many families simply decide they cannot afford to buy insurance cover.
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