Millions of households and motorists face a steep rise in the cost of new insurance policies later this year due to an increase in the tax insurers are charged. Yet you may be able to beat the hikes by locking in quotes early.
Chancellor George Osborne today announced a rise in Insurance Premium Tax (IPT) from 6% to 9.5% from November.
The tax hike applies to pet, car, mobile, contents, buildings and private medical insurance. See our pet insurance, car insurance, mobile insurance, home insurance, and health insurance guides for help getting the best deals.
The British Insurance Brokers' Association (BIBA) says the move will result in hikes for 20.1 million households with contents insurance, 19.6 million with motor insurance and 17 million with buildings insurance.
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Beat the hike
As you can lock-in quotes 60-90 days before the policy is due to start, it's worth checking in September or October if your insurance is due for renewal in the next few months.
Not all types of insurance will be included. Travel insurance policies, for example, will be excluded from the hike because they are charged at a higher rate of 20%, which isn't changing.
There may also be an increase to any administration fees charged, such as for changing a name or address on a policy as the tax is levied at this stage too.
IPT was first introduced in October 1994 and while it is a tax on insurers, they add it to the cost of policies. It last rose in January 2011 when it increased from 5% to the current 6%.
Additional reporting by Tony Forchione and Paloma Kubiak.