BIBA says consumers and businesses will be hit by increasing insurance costs
The British Insurance Brokers’ Association (Biba) said it is "disappointed" that the Government has announced increases to Insurance Premium Tax (IPT) in today’s budget.
BIBA believes that the increases to the lower rate of IPT from 5% to 6% and the increase to the higher rate of IPT from 17.5% to 20% will serve only to add further financial pressure during the recession and discourage individuals and small businesses from taking out adequate and appropriate insurance protection.
Biba chief executive Eric Galbraith said: “This is a tax on protection, BIBA’s research last year demonstrated that businesses and consumers were reducing insurance cover as a result of the recession and we are concerned that increases to insurance premiums as a result of IPT could lead to even further underinsurance or even a lack of insurance protection. The last thing people need in a financial crisis is a higher insurance bill.”
Biba said consumers and businesses will see their motor, property and travel insurance premiums increase as a result and the broker body has warned customers that cutting out or reducing essential cover could be a false economy.
Biba also urged customers to seek advice from an insurance broker who can help families and businesses to manage their insurance protection in the most cost effective way.