Motorists could see their annual insurance bills fall by nearly £40 under the government’s plans to crack down on whiplash claims.
There has been a booming industry in whiplash fraud in recent years, with innocent customers ultimately footing the bill for these huge payouts. It is thought that whiplash claims following car crashes have risen by 50% over the past 10 years or so.
The recent Queen’s Speech, which set out the government’s legislative agenda for the year ahead, said there would be legislation to “modernise the courts system and help reduce motor insurance premiums”.
Under the plans, claims not backed up with medical evidence will be banned and a cap on payouts will be introduced.
Steve Treloar, managing director of general insurance at LV=, said: “The UK is the world capital for whiplash claims and, with fraudulent claims adding around £40 to the average car insurance policy, we have to clamp down on the compensation culture that is rife in this country.
“The original proposals from the government on tackling whiplash didn’t go as far as we felt was necessary so we’re pleased that they are now committing to making the changes that we’ve long been asking for.
“Ultimately, we need a fair system that works for everyone, and in light of these new plans we’re hopeful of getting that.”
Kevin Pratt, of comparison service Moneysupermarket, also welcomed the news, but remained wary of assuming the government’s promise would be kept.
“If an overhaul of the way courts deal with compensation claims can reduce levels of fraud relating to exaggerated or fabricated whiplash injuries, there should be a benign effect on premiums – an annual saving of £40 has been mooted,” he said.