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What is Insurance Premium Tax (IPT)?

• Updated

Insurance Premium Tax (IPT) is a tax that’s added to the cost of a variety of insurance products, such as GAP insurance.

There are two rates of IPT:

  • A standard rate of 12%, which applies to most standard insurance policies.

  • A higher rate of 20%, which may apply to insurance policies taken out when buying a new car.

If you purchase GAP Insurance, the IPT fee is automatically applied to the cost of your policy at a higher rate of 20%.

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