Millions of households and motorists are likely to be hit with higher insurance premiums hitting the UK tomorrow, but you can take some last minute action to dodge the hike.
The Government will raise insurance premium tax (IPT) from 10 per cent to 12 per cent from June 2017.
The tax increase applies to pet, car, mobile, contents, building and private medical insurance.
How much more will I pay?
Although the increase is aimed at insurers, they will usually pass tax increases onto policyholders – rather than pay themselves.
The increase will be an average of £51 to the average household’s insurance bill.
Policyholders could also see a jump in administration fees that insurers charge, such as changing a name or address on a policy, as the tax is imposed at this stage too.
How can I dodge the tax increase?
If you’ve got an upcoming renewal for any of your insurance policies. It might be worth locking in the price today.
Most insurers allow you to lock in quotes 60-90 days before a policy is due to start, so if you have any policies that will need renewing within the next three months, it will be worth locking in a quote as soon as possible.
What about travel insurance?
Some types of insurance, such as travel insurance, will not be hit by the IPT increase as they’re charged at a higher rate of 20%, which is not changing.