In the 2016 Autumn Statement, the Chancellor, Philip Hammond, has announced an increase to the amount of tax added to insurance premiums, as well as plans to protect safe drivers with an end to ‘whiplash cash’.
Here’s how the government’s plans could affect you and your premiums next year.
Changes to Insurance Premium Tax
Insurance Premium Tax (IPT) is an amount of government tax that’s added to your premium when you start or renew your policy.
From 1 June 2017, the standard rate of insurance premium tax will increase by 2% to 12%. So for things like motor insurance, pet cover and home insurance (as well as other types of cover), you’ll pay a higher rate of tax than you did before.
This change doesn’t affect life insurance or some types of permanent health cover as you don’t pay any tax on these policies. Travel insurance isn’t affected either (as this is already subject to a higher rate of IPT).
What do I do next?
While we can’t change the rate of tax that’s added to your premium, remember that you can check the total amount you’re paying for your policy with us online. Simply log in to MyAviva to view your policy information.
Rewarding safer drivers and ending ‘whiplash cash’
The government has announced that it plans to change the way you can claim for minor whiplash if you have an accident.
Genuine motor accidents can be a frightening time – but if someone makes a claim for an injury they don’t have, it can end up being more expensive for everyone - even if you’re a safe driver.
Some of the changes the government could introduce to make sure only genuine claims receive help include:
- an end to the automatic right to claim for whiplash
- a limit to the amount you can claim for minor whiplash
- making sure that you provide a medical report with your claim – so that we know it’s genuine
What does this mean for me?
You could save up to £40-£50 a year on your motor insurance if the government introduce these measures.*
By reducing the amount of money insurance companies spend on claims for whiplash that aren’t genuine, means that we can pass that saving on to you.
We’ve been asking the government to make these changes for a long time – and we will pass on 100% of these savings to you. So you’re really rewarded for being a safe driver with us.
For another way to save money on your motor cover, why not take our Aviva Drive challenge? Go to aviva.co.uk/drive to find out how to take part.*Personal circumstances apply.