Insurance Premium Tax increases from 10% to 12% on 1st June. Neither insurance companies nor insurance brokers benefit from this tax imposed by HM Government. On the contrary, it costs us time and money to collect, collate and forward it. As brokers, we do not receive commission on the IPT element of premiums.

Policies with a risk of personal injury liability such as motor or trades cover are also showing an increase as insurance companies have to allow for the change to the Ogden rate. In simple terms, the Ogden rate is used to calculate the amount someone is awarded if they suffer a long-term illness or injury. The continuing low interest rate has led to a situation where such people are not getting the returns they should by investing a lump sum. Improvements in medical care and general increase in life expectancy are also factors.

Whilst paying more for your insurance may be a struggle, please do not skimp on this important area of your life. It is already estimated that 1 in 10 of the vehicles on UK roads are either not insured at all or incorrectly insured. Don’t join that number. If you are a tradesman, you could damage property or cause injury to customers, employees or bystanders. Don’t risk not being insured or being under-insured.