With insurance premiums already on the rise more bad news sees the Government go ahead with an insurance premium tax increase from November 2015.
It seems once again the taxpaying motorist is about to be hit hard by a further rise in tax. This time as announced in Chancellor Osborne’s summer budget 2015, there will be an insurance premium tax increase for the fifth time since its introduction in 1994. The current rate of 6% will now be set at 9.5% with effect from November; this means a massive upturn of 58%, the largest we have seen overall.
The Government has of course sought to justify the insurance premium tax increase by stating that “many households have seen insurance premiums fall over recent times” although figures suggest the opposite. In fact when it comes to car insurance over the last 12 months premiums have actually increased by 5.5%. The Chancellor goes on to say that the insurance premium tax increase will only effect one-fifth of all insurance premiums, however the British Insurers Broker Association have slammed the move as nothing but a “stealth tax” which will hit millions of ordinary households and of course thousands of classic car owners.
Many claim management operations have also been implicated as part of the cause. According to the Chancellor, these services are seen to be expensive with extortion fees being claimed for, thus adding to the cost of insurance. “The Chancellors pledge to scrutinise the regulation of claims management companies, and in particular, to cap fees they can charge is long overdue” says Rob Townsend who runs Aviva’s general claims operation in the UK and Ireland. What’s more, with 11% of drivers willing to make a personal injury claim even though no injury had occurred, this fraudulent approach allegedly encouraged by some claims management companies has to stop.
And so it seems inevitable that once again car insurance premiums are heading in the wrong direction thanks to insurance premium tax increase. Although here at Heritage Classic Car Insurance we will of course continue to keep our rates as competitive as always by offering great discounts for limited mileage and club members to name but a few. After all we are enthusiast to.
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