It looks very likely that our customers will have to foot the bill for the almost 59 per cent increase in insurance premium tax announced in the summer Budget. Will this affect the amount of insurance people buy?
The AA predicts an average £5 rise in home insurance. That could be enough for some consumers to downgrade their policies or cut cover altogether. A recent study by Consumer Intelligence revealed 27 per cent would cancel policies or reduce cover as a result of the increase while 56 per cent would consider switching providers.
As the people on the front line, intermediaries will have a tough job explaining why premiums have gone up if insurers pass on the increase as expected.
Proactive communication will be key to making sure clients understand the risks if they downgrade or cancel policies. Help them to review their circumstances and identify where they could alter cover to meet their budget. Most importantly, make sure they are meeting their insurance obligations to their mortgage lender for adequate buildings insurance.
Do not forget that the general insurance providers are there to help you. Together, we can deliver the solutions your clients need and ensure they remain protected.