What Pushes Up Insurance Premiums and How to Avoid Them
Knowing what pushes up insurance premiums and how to avoid them is critical if you want to save money on
What is the UK Premium Insurance Tax?
This is a tax imposed on most types of insurance policies issued in the UK including automobile coverage. This is classified as an indirect tax that was first imposed on the public in 1994. The reason for the tax was because the UK government felt the insurance industry was not taxed sufficiently so they created this tax to collect revenue from them.
There are 2 different rates.
- 1The standard rate is currently at 12% which most vehicle owners now pay.
- 2The higher rate is at 20% and is applied is special instances.
In truth, the tax is imposed upon the insurance companies. Like all expenses imposed on the insurance industry, they pass it on to the public in the form of higher premiums. This percentage has doubled in the past 3 years.
The only thing that can be done to counter this tax is to get parliament to reduce or remove it.
Does Texting while Driving Increase my Premium Rates?
It is already known that being distracted while operating a motor vehicle is very dangerous and could lead to an accident. With the rise in texting on a mobile device, there has been a rise in accidents from drivers that are distracted.
To help combat this problem, insurance companies now deploy technology that can tell if the driver was texting or using their mobile during the time of an accident.
The simplest way to prevent an increase in your insurance premium is to not use your mobile device while operating a vehicle. If you are using your mobile device and your vehicle is involved in an accident, your fault or not, your premiums will go up.
Can I Reduce my Premium Cost when taking out a Policy?
When you purchase your policy is a big factor in the overall cost of your premium. By purchasing your insurance in advance by as much as 1 month can significantly reduce the costs you will pay. This occurs because people that are prepared and do not wait until the last minute are viewed as those that take fewer risks.
Are there Other Ways to Reduce my Insurance Premium?
These are a few of the reasons on what pushes up insurance premiums and how to avoid them. The best way to