The Insurance Premium Tax (IPT) rate has doubled in just the past few years, with its most recent increase growing from 10% to 12%. With motor, home, pet and health insurance all affected, companies warn that an average family can expect to pay an additional £47 per year as a result. A spokesman for the treasury stated “Insurance Premium Tax is a tax on insurers, not consumers – insurance firms decide whether to pass it on to their customers or not”. However the percentage tax has raised criticisms, in that it punishes responsible people who have done the right thing by buying cover for their cars and homes, according to the Association of British Insurers. This is because percentage tax bears heaviest on those with the most costly policies, such as those living in flood risk zones across England.
Flood risk across the UK has been rising rapidly over the past few years, due to attributes such as climate change and increased urbanisation of once natural floodplains. Caroline Russell, the Green Party candidate challenging Labour leader Jeremy Corbyn in his Islington North constituency, recently explained to the Greener UK Hustings conference that “we are getting more water from climate change and there is nowhere for the water to go”. This anticipated inevitability of flooding has proven entirely true, as seen in recent disastrous flooding events such as Storm Desmond, which affected more than 6,000 homes in 2015.
How Will it Affect Homes?
How hard the rise of the IPT rate shall hit homes is uncertain due to the constantly increasing risk of flooding in England, while the vitality and appeal of investing in home insurance rises alongside it. Individuals can take other precautions in preparation for floods, however, such as knowing the nature of the area in which their property lies. The Environment Agency, for instance, runs an online service allowing people to sign up to receive flood warnings in their area as well as receive basic advice on provisions – such as drawing up a ‘personal flood plan’.
If you are unaware of whether an area falls within a flood zone the GOV.UK website can provide you with a flood risk map to your property and the surrounding area, whether it be your home or a property under the proposal of development.
In light of the rising IPT rates, it is important to understand the risks of flooding that your area may face in order to ensure that insurance premiums on your home or property are not overestimated. Unda’s extensively experienced consultancy team can provide you with a site specific flood risk assessment for this reason, as well as to satisfy insurance companies that specifically request one be carried out.
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For more information on obtaining Flood Risk Assessments Approved by Insurance Companies feel free to Contact Us.