P.J. Hayman, specialist Travel Insurance and Schemes provider is calling for the Government to lower the 17.5% Insurance Premium Tax (IPT) that is payable on all travel insurance.

This rate was initially introduced in an attempt to deter travel agents from giving holiday discounts on the condition that travel insurance was purchased as part of a package, thereby forcing customers to pay more for their travel insurance and use a specific provider. However this rate is not only 2.5% higher than VAT but is 12.5% higher than for other types of insurance such as motor or household, and as a result, travel insurance customers are unfairly penalized.

Peter Hayman, director of P.J. Hayman, said: “It is important that the Government reassesses the level of Insurance Premium Tax. Sales through Travel Agents and Tour Operators have been on the decline for many years and now represent less than 25% of the total market which means that there is now an unfair tax on travellers. With VAT currently at 15%, it makes no sense at all for IPT to be such a shockingly high rate.”

Also, Peter Hayman, commented on WHICH?’s review of low cost airlines approach to travel insurance provision: “Following the EU ruling in November 2008, we are surprised that some airlines continue to work to ensure that their passengers purchase travel insurance as part of their flight package. 

“All of the policies reviewed as part of this study contained restrictions for those with pre-existing medical conditions. Therefore, consumers who fall into this category are doubly penalised: first by being pushed to purchase a product they may not want and secondly by finding that they may not be covered by the insurance if they do claim.

“We applaud WHICH? for highlighting this serious issue and urge consumers to read the small print on their travel insurance policies to ensure that they are fully covered for all eventualities.”