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Brokers call for tax break as car premiums hit 6-year high

Brokers call for tax break as car premiums hit 6-year high

Brokers call for tax break as car premiums hit 6-year high The British Insurance Brokers’ Association (BIBA) has called for a tax break for telematics-based insurance products after car premiums reached their highest levels in six years.
 
According to BIBA’s latest insurance price index, premiums paid for private car insurance was more than 11% in the second quarter when compared to the same period in 2015.
 
With the addition of insurance premium tax (IPT) – which itself spiked by 66.7% – motorists are paying 15% more for the same cover.
 
This has been the highest level since the index began monitoring premiums in 2010, BIBA noted.
 
The industry body said the latest motor premium hike is particularly hard on younger motorists since they already pay more than £1,300 on average, in the face of a potential annual increase of £200.
 
BIBA is now urging the government to provide IPT relief on telematics insurance products to increase the reception among drivers aged below 25.
 
Research has shown that there is a 40% drop in crash risk for new drivers that use a telematics device, said BIBA executive director Graeme Trudgill.
 
“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,” Trudgill said.
 
“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.
 
 
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