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ABI reiterates call for government to slash IPT, Bit like squeezing a balloon, Note no calls on the ABI to reduce premiums as a result of whiplash reforms?but they want to reduce tax! More #bollocks

By 31st January 2020 No Comments

 

When I read any type of statement from the ABI , you can see what Noahm Chompsky would advise as “media brainwashing of the masses”.

 

Trade body’s data shows motor insurance premiums rose again in the last quarter of 2019 with increases in IPT and changes to the discount rate driving up prices. The Association of British Insurers (ABI) has called on the government to reduce the rate of the insurance premium tax (IPT) after the average price for comprehensive motor insurance continued to rise in Q4 2019. The trade body’s latest Motor Insurance Premium Tracker showed that the average premium paid in Q4 2019 was £484, up 3% on the previous quarter and the third highest quarterly level since 2012, when the ABI started collecting the data. In addition, the average motor premium paid in 2019 was £471, which is the third highest annual figure on record.

IPT has doubled to 12% since 2015 and brokers, insurers and trade bodies have previously urged the government to reconsider the rate. The ABI added that the government is raking in more from IPT than from some of the ‘sin taxes’, such as the duties on beer, wine and gambling. In the financial year 2018/19, the government collected £6.3bn of IPT. Repair costs According to the trade body, the increasing prices on motor insurance in 2019 arose from: The government’s changes to the personal injury discount rate in July. Rising repair costs, reflecting ever-more sophisticated vehicle design and technology which, in most cases, are more expensive to repair when damaged. In the first half of the year, the repair bill for insurers (£2.3 billion) rose by 11% on the same period in 2018. The cost of vehicle theft, which, in the first half of the year, was up by 18% on the same period the previous year. IPT, which the ABI described as “the mother of all stealth taxes” and currently adds an extra £50 to the average annual motor premium. Mark Shepherd, ABI’s assistant director, head of general insurance policy, said: “Motor insurance may remain very competitive, but motorists still face being on the receiving end of the mounting cost pressures that insurers are facing. “One obvious and much needed way to help motorists is for the Government to reduce the IPT burden in its March Budget.  “This tax penalises drivers for simply complying with the law and having motor insurance, hitting hardest those facing higher premiums, such as younger drivers.”

All of the above is created to mislead.

No reference to how  premiums back to 2008?

No reference to the savings as result of the “whiplash reforms”?

The rising cost of repair? but no statement to the demographic of increased value of vehicles in the insured books due to more people leasing newer cars and using finance more?

Repair cost are not “rising” the value of cars being repaired is? you can have £100,000 Mercedes with every bit of Autonomy attached, and it is indeed very expensive to repair. But when it is ten years old? fifteen?

All this additional technology is no longer more expensive to repair, as the car is a total loss.

IPT is still less than the 20% VAT you pay on everything else you buy. Insures are benefiting by an additional 8% leeway given by government to allow them increased profit. But the ABI does make you aware of that.

 

Be careful of what you read in the media…… a change of viewpoint provides a very different perspective.

 

Content care of www.insuranceage.co.uk

 

 

 

 

 

 

 

Tim Kelly

Tim Kelly

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