Millions face insurance hikes - but you can beat them

Millions of households and drivers face a steep rise in the cost of new insurance policies, following the latest hike in the tax that insurers are charged....
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  • forgotmyname
    forgotmyname Forumite Posts: 32,292
    Part of the Furniture 10,000 Posts Name Dropper
    Steep rise? 2% ?? So even a £3000 policy its only £60? My favourite junk food snack has risen more than that :(

    I read this on the BBC site yesterday, the comment was its a tax on the insurer not the customer. The insurer does not have to pass it onto the customer.

    Something smelly and linked to farm animals me thinks.
    Censorship Reigns Supreme in Troll City...

  • BJV
    BJV Forumite Posts: 2,448
    Part of the Furniture 1,000 Posts Combo Breaker
    Well it is a tax on an insurer but ultimately it will be passed on to policy holders. IPT has risen over 6% in the last few years. No insurance company no matter how big or small can absorb that and if they could god they have been charging you too much from day one. Stealth tax springs to mind???
    Happiness, Health and Wealth in that order please!:A
  • paddyandstumpy
    paddyandstumpy Forumite Posts: 1,486
    Ninth Anniversary 1,000 Posts Name Dropper
    It's not a tax on insurers, it's on the premium they charge.
  • BJV
    BJV Forumite Posts: 2,448
    Part of the Furniture 1,000 Posts Combo Breaker
    Ok well to be absolutely clear. IPT ( insurance premium tax ) is a tax on insurance. As insurance is non vatable it is a way of the government getting their pound of flesh. But it will cost policy holders ultimately. For accounting the cost of policies has to be split. E.g your car insurance is £200 & IPT total x. This is to make sure that HMRC get the correct amount. Insurance companies are not simply going to absorb it. They will put prices up. 2 % is not a lot but on your home insurance, car insurance it can cost a lot. I just sincerely hope that companies do not use it as a way of increasing the base cost as well as allowing for the extra 2%. remember that in the last few years it has gone up and up and is almost double what it was 7 years ago.
    Happiness, Health and Wealth in that order please!:A
  • mattk_180
    mattk_180 Forumite Posts: 375 Forumite
    There's no"likely" about it. All consumers WILL be charged 12% and is the case as of yesterday.

    Also, as the extra 2% is being passed onto the consumer, I can't see why they would increase the base cost to "allow for the extra 2%". Especially as they can increase it how they please anyway.

    I know any increase at all shouldn't be brushed off as not being a bit deal, but I do feel as though the media are going a bit overboard.

    Non-consumer customers should be the ones to be most upset about it when every 1% could potentially mean hundreds of thousands. Not little old John that's going to be paying an extra £2 on his car insurance and £1 on his house insurance.

    It won't end here either. I've said ever since it went up to 6% that it will keep going up until it's in line with VAT (like it is in Germany).
  • Voyager2002
    Voyager2002 Forumite Posts: 15,118
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Tesco have just increased the premium for my home insurance by 25 per cent! The tax clearly accounts for a tiny proportion of this.
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