The British Insurance Brokers’ Association (BIBA) has once again called for an Insurance Premium Tax (IPT) break on telematics insurance products following news that that the cost of private car insurance has risen again.
The increase, up more than 11% net, compared to the same quarter in 2015, has been tracked by the latest Insurance Price Index from BIBA and Acturis. When Insurance Premium Tax (IPT) is added – which itself has increased by 66.7% in the same period – motorists are paying 15% more for the same cover, the highest amount recorded since the index began monitoring premiums in 2010.
BIBA said that the latest hike in motor premiums was especially hard on younger motorists who already paid premiums of over £1,300 on average and could be faced with an annual increase of £200.
Last year, BIBA along with the UK’s third largest private car insurer, Ageas, called on Government to provide IPT relief on telematics insurance products, to encourage take-up by drivers under 25 years old.
Graeme Trudgill, executive director at BIBA, is once again lobbying Ministers for a tax break, saying that young drivers are over-represented in road fatalities.
“They make up just 12% of licence holders, yet account for 25% of road deaths,” he said.
“BIBA member research shows that there is a 40% drop in crash risk for new drivers that use a telematics device so any incentive to use these policies will be a great boon for road safety. Removing IPT would increase this motivation, improve road safety and yet still have a net financial benefit to the economy over time so we will certainly be encouraging Treasury to consider this move.”
“The incidence of uninsured driving is also increasing in the younger age group and measures that help make cover more affordable could help reduce this trend. We see no downside for implementing this tax break,” he added.