If the rises go ahead, the government will in effect be penalising those that do protect themselves by buying insurance - creating an even larger incentive not to bother. What we'd like to see is encouragement for more consumers to protect themselves, not changes which may prove detrimental to the industry.
Cardiff, UK (PRWEB) June 16, 2010
Simon Lamble, product director at Confused.com, comments on the mounting speculation that the government could be planning increases of up to 17.5% on policies including car, pet and home insurance in the emergency budget.
Simon Lamble, product director at Confused.com, says: "This wouldn't be the smartest move from the government and the raising of IPT levies could well prove to be a false economy. Cost-cutting consumers may choose to decrease their level of cover in order to keep their overall premiums the same, rather than absorb the increase in IPT. This would effectively mean a large volume of consumers with insurance will be underinsured, and extra revenues collected through increasing IPT may well be swallowed up in other areas as the government picks up the costs of this deficit.
"It's particularly depressing for car owners where insurance is a compulsory purchase. The Confused/EMB Car Insurance Price Index showed that in 2010, there has been, on average, a 14% year on year increase in price and we expect this trend to continue. Any increase in IPT will exacerbate this effect further, putting people off buying insurance which is bad news.
"With insurance costs already rising and household budgets being squeezed, consumers are likely to be even more blasé about the need for insurance, putting themselves at risk. People will be more prepared to 'gamble' with non-compulsory insurances, which is a real concern.
"If the rises go ahead, the government will in effect be penalising those that do protect themselves by buying insurance - creating an even larger incentive not to bother. What we'd like to see is encouragement for more consumers to protect themselves, not changes which may prove detrimental to the industry."
For further information please contact:
Confused.com Press Office: 02920 434 398
Confused.com is one of the UK's biggest and most popular price comparison services. Launched in 2002, it generates over two million quotes per month. It has expanded its range of comparison products over the last couple of years to include home insurance, travel insurance, pet insurance, van insurance, motorbike insurance, breakdown cover and energy, as well as financial services products including credit cards, loans, mortgages and life insurance.
Confused.com is not a supplier, insurance company or broker. It provides a free, objective and unbiased comparison service. By using cutting-edge technology, it has developed a series of intelligent web-based solutions that evaluate a number of risk factors to help customers with their decision-making, subsequently finding them great deals on a wide-range of insurance products, financial services, utilities and more. Confused.com's service is based on the most up-to-date information provided by UK suppliers and industry regulators.
Confused.com is owned by the Admiral Group plc. Admiral listed on the London Stock Exchange in September 2004. Confused.com is regulated by the FSA.