Insurance premium tax is due to rise once again in June 2017 to 12%. Since Kenneth Clarke announced in his November 1993 budget that insurance premium tax was being introduced in 1994 at a level of 2.5%, the rate has slowly increased. However, the rate and exponentially increased since its 6% level (as recently as 2015).
The tax increases affect 26.5 million motor policies and 20 million household policies. There are not many people that it does not affect! Of course the larger the premium you pay the more tax will be levied.
Due to these increases, it has never been so important to ensure that you are paying a competitive premium for your High Value Home and Motor Insurance. We would always advise to make time to see your High Net Worth insurance Broker at least once a year (usually at renewal) to go through your cover to ensure everything is up to date. As an Insurance Broker of over 25 years, it never ceases to amaze me what can come from a 30 minute face to face meeting. In addition, having a High Net Worth Broker at the end of a phone to answer a query is invaluable, and it could be the difference between having a claim paid or repudiated.
Many High Net Worth individuals do not have the time to constantly review their cover, therefore they have to place their trust in a High Net Worth Insurance Broker to help do this for them. A good High Net Worth Insurance Broker with excellent relationships with Underwriters can achieve the very best rates for their clients, without compromising on cover.
A word of warning to those High Net Worth clients considering going direct to an insurer and dropping their Broker; a good High Net Worth insurance Broker will highlight any potential pitfalls to your specific policy. A direct policy will not do this, in fact there may be restrictions in their policy wording that could trip you up in the event of a claim. To fully translate and understand some policy wordings on the market you almost need to be an Insurance Broker yourself! Whilst saving money on a household or motor insurance policy is attractive; having a claim repudiated because you did not read the cover correctly will be a lot more costly!
For the client that is looking for catastrophe cover, a higher excess can result in significant savings. In addition, clients with large jewellery and watch collections can attract a lower premium by installing a sufficient safe and agreeing a floating limit* (*an agreed limit that can be removed from the safe at any one time). Upgrades to your security can also provide further discounts, whilst also helping to protect your family and belongings.
At McLeod Insurance, we have excellent relationships with our panel of reputable High Net Worth insurers; offering the broadest cover in this niche area of insurance. If you a problem then we can often find a solution, just ask!
Whatever your circumstances, a good High Net Worth Insurance Broker should be able to offer you the cover you require at the most competitive premium. Unfortunately, insurance premium tax is the one thing we have no control over!