Insurance premiums have been rising over the past decade, meaning less people can afford to get their vehicles out on the road. But people struggle to understand why the constant rise in car prices are happening. This blog should help you in understanding why your insurance prices have risen by over £100 on average.
Insurance Premium Tax:
IPT is the tax on insurers and covers general insurance premiums. The standard rate is 12% for this which is an increase of 7% in six years. On the contrary, some more specific insurance types have a higher rate of 20% for IPT which has risen by 2.5% in the last six years.
Ogden Discount Rate:
This is important when claiming insurance. For example, if Dave needed medical attention and couldn’t go back to work again this rate decides the amount of earnings Dave would lose and the cost of caring him. Therefore, the change in rate from -2.5% to -0.75% causes the costs for the insurer to increase. This in turn increases your premium as insurers must balance the books.
Tips on how to lower costs:
To help lower costs for yourself we recommend that you have many car safety features and if possible take a further education test as this lowers your premium. But the biggest advice is search around websites to get yourself the best deal as this can save you a surprising amount as well.
If you have found this useful and would like a quote from our dedicated team then call on 01613882520
. On the other hand, if you want further information fill out this form and we will get in touch. Here at Alternative Insurance Brokers we understand how difficult it can be to purchase insurance and we hope to make the process as smooth as possible.