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Insurance Premium Tax hike pushes up the costs of home insurance says ABI

The average cost of insuring your home and its contents has risen due to the hike in Insurance Premium Tax (IPT) according to the ABI’S latest Home Insurance Premium Tracker published today.

If it had not been for the rise in the rate of IPT from 6% to 9.5% last November, the average price paid for a combined building and contents policy in the last quarter of 2015 would have fallen.

Figures from the ABI’s latest quarterly average household premium tracker, the only market indicator of what homeowners actually pay for their home insurance reveal that:

  • The average annual premium paid for a combined building and contents policy was £316 – at 87p a day, less than the average price of a loaf of bread. This is up 1% compared to the previous quarter.
  • The average annual premium paid for a buildings only policy was £256 or 70p per day. This is a 3.5% rise compared to last quarter, and a 1% rise compared to a year ago.
  • For contents only insurance, the average annual premium paid was £138, or 38p per day. This is a 3.5% rise compared to last quarter, up 0.5% in the last year.

Mark Shepherd, the ABI’s General Insurance Manager, said:

"Last December’s devastating floods reinforced how vital home insurance is. Insurers continue to help thousands of flood victims get their lives back together with the average payout of around £50,000.

"Events like flooding, make it even more important that the rate of Insurance Premium Tax should not be increased. For most people their home is their biggest asset, so anything that increases the cost of insuring it must be pushed back against."

For more information, including interactive chart see our industry data update.


Last updated 01/07/2016