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Motor premiums leap £59 due to IPT

By 1st February 2018No Comments
Author: Sian Barton
Source: Insurance Age | 21 Jan 2016
Categories: Broker
Tags: premium | AA Insurance | motor
AA Index reveals 10% leap over fourth quarter of 2015 and fraud also costs £50 per policy.
Car insurance premiums leapt an average of £59 in the last quarter of 2015 according to the AA British Insurance Premium Index.
The AA said that during the three months the average premium rose by over 10%, the largest increase since 2010.
The provider said that the Insurance Premium Tax (IPT) of 9.5% had “piled on the misery” for motorists who have seen the typical cost of cover rise 20% over the past 12 months.
Michael Lloyd, director of AA Insurance, pointed out that the imposition of IPT, which took effect from 1 November 2015, has been responsible for most of the premium increase recorded this quarter, adding out that the average increase would otherwise have been below 7%.
Future
He commented: “We expect premiums to continue to rise though 2016 but not at the exceptional rate recorded over the last quarter of 2015. And the sooner new legislation to tackle whiplash claims becomes enshrined in law, the sooner that will be reflected in the premiums quoted for car insurance.”
On average premiums rose 10.4% in the last quarter of 2015 and 20.3% over the full year.
Lloyd also noted that personal injury claims, particularly whiplash continue to “haunt the industry”. The organisation estimated that false and exaggerated claims add around £50 to each policy.
Reputation
Lloyd said: “The UK suffers the unenviable reputation for being the ‘whiplash capital of Europe’ with the number of claims continuing to pile in, encouraged by vigorous cold-calling claims firms. 

“New legislation proposed by the Chancellor in his Autumn statement and again in January, designed to curb claims activities and weed out spurious and fraudulent injury claims, is some months away from becoming law but are widely welcomed by insurers.
“Meanwhile, the Insurance Fraud Taskforce, to which the AA contributed, has proposed a range of additional measures to help tackle fraud ranging from organised crime to opportunistic attempts to rip off insurers, which has been welcomed by the Government.”
The AA advised that research it undertook last year showed that 11% of respondents to a poll of over 20,000 drivers thought it was acceptable to make an insurance claim for injury following a collision, even if no injury was suffered.
Lloyd added: “It’s this acceptance that it’s OK to defraud insurers that has become endemic. It is stealing and it affects the premiums paid by your friends, your family and your colleagues – those that most wouldn’t dream of defrauding.”

http://www.insuranceage.co.uk/insurance-age/news/2442698/motor-premiums-leap-gbp59-due-to-ipt?utm_medium=email&utm_term=&utm_content=Motor%20premiums%20leap%20%C2%A359%20due%20to%20IPT&utm_campaign=IA.Daily_RL.EU.A.U&utm_source=IA.DCM.Editors_Updates&im_mfcid=2e8a1e834d389beecf25a1ee9d633d29

Tim Kelly

Tim is a highly qualified Independent Engineer with over 20 years experience as an Engineering Assessor of damaged vehicles.

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