The AA says that if your car insurance rates have gone up this year, the true culprit behind the rate hike is none other George Osborne.
Now, don’t get me wrong – I’ll take any opportunity to lob a few eggs at the reputation of our honourable Chancellor of the Exchequer, so I’m not about to look a gift horse like this in the mouth. But in the spirit of fairness it should be made known why AA Insurance thinks Mr Osborne is responsible; it turns out that the Chancellor’s summer budget had what the AA calls a “stealth tax” in it that is linked to car insurance companies raising prices by more than £100 on average over the last 12 months.
In the largest increase in motor car insurance prices since 2010, average premiums jumped by 10 per cent over a three month period in 2015. For the entirety of 2015, rates when up by an astonishing 20 per cent in total, with the new average rate, according to the AA, coming in at more than £625 – around £105 more than the yar previous.
So where’s this so-called stealth tax come in? Well the AA accused the Chancellor of slipping it in during the summer budget; the change, called the Insurance Premium Tax, impacted something close to 7.3 million car insurance policie when it went into effect this past November. The Treasury will likely rake in more than £8 billion over the next five years as a result – and it’s all coming from the pockets of motorists.
Simply lovely, isn’t it? Now truth be told that’s not the only thing that drove up insurance rates in 2015. It just wouldn’t be fair if we didn’t point the finger at the fact that insurers have been whinging about how much cash they have to layout for insurance claims from hard-to-disprove injuries like whiplash, after all. Whiplash claims have indeed been a thorn in the side of car insurance companies to the point where they have been campaigning long and hard to make it more difficult to claim for these kinds of injuries or by reducing the amount of possible compensation a whiplash sufferer can claim, but this isn’t a new tune the insurance sector is singing, now is it?
At any rate, this new Insurance Premium Tax certainly isn’t helping anyone besides the Treasury. It’s certainly not making it any easier for people like you and me to afford car insurance cover, now is it?