PARLIAMENTARY WRITTEN QUESTION
Insurance Premium Tax (30 November 2016)

To ask Mr Chancellor of the Exchequer, if he will make an assessment of the effect the increase in insurance premium tax announced in the Autumn Statement 2016 will have on home insurance premiums for families affected by Storm Desmond.

Asked by:
Tim Farron (Liberal Democrat)

Insurance Premium Tax is a tax on insurers, so any impact on premiums depends on how far and whether they pass on the rate increase.

If insurers pass on the whole rate increase, it is estimated that this would add £7 per year to the average annual cost of combined buildings and contents insurance, or £3 to the average annual cost of contents only insurance.

The Government announced an extra £700 million investment in flood defence and resilience measures after Storm Desmond. The Government has worked with the insurance industry to create the Flood Re scheme which ensures that households in areas of high flood risk can access insurance.

Answered by:
Jane Ellison (Conservative)
6 December 2016