Car insurance prices to rise from 1 November

Starting from 1 November, the cost of car insurance is going to increase by an average of £13, whilst home insurance is set to rise by £10, according to predictions by the Association of British Insurers (ABI).

Certain other insurance covers are also set to rise. Pet insurance costs will rise £10 too, whilst private medical insurance is expected to rise by at least £40.

These increases are a result of government changes to Insurance Premium Tax (IPT). The amount of IPT added to insurance policies is going to rise from six per cent to 9.5 per cent.

However, some types of insurance cover are excluded from the IPT. Mortgage and life insurance are unaffected, as is travel insurance, which will remain at the tax rate of 20 per cent that customers are currently being charged.

The changes will bring in an extra £8.1 billion by 2021, according to estimates from the Treasury.

“Whether it’s a legal requirement or you want to buy extra cover, insurance is a financial safety net, not a luxury,” said James Dalton, of ABI.

“While insurance remains one of the most competitive industries in the UK, its affordability can’t be taken for granted. Further tax increases must be avoided if insurance is to remain accessible for all.”

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