<p>Insurers must pay IPT on the value of premiums received for general insurance. If insurers pass on the full rate increase to their customers, the impact on premiums would be an increase of only 3.5%.</p><p> </p><p>Tax forms only a small part of the cost of motor insurance. Other factors include competition, the volume of low value personal injury claims and fraud. The government has taken steps to crack down on the fraud and claims culture such as announcing at Autumn Statement 2015 proposals to end the right to cash compensation for minor whiplash injuries. The government expects the insurance industry to pass an average saving of £40 to £50 per motor insurance policy on to consumers.</p><p> </p><p>The government also encourages consumers to shop around for the most suitable cover at the best price.</p><p> </p><p> </p><p> </p><p> </p><p> </p>