Whiplash claims have rocketed in recent years – thanks in no small part to unscrupulous claims companies encouraging people to make exaggerated and even fraudulent claims – and they’re driving up the cost of car insurance. So it’ll come as welcome news that the Ministry of Justice is stepping in, and will hopefully reverse the trend.
The Government says that whiplash claims are 50% higher than they were a decade ago, despite the number of road accidents falling over the same period. This has been driven by a "predatory claims industry", it says, and ordinary, law-abiding motorists are paying for it.
As such, the Ministry of Justice has launched a consultation that will look at proposals to reduce the "unacceptably high number" of whiplash claims, and happily, insurers have pledged to pass on the estimated £1bn in savings to drivers – which could save you about £40 a year.
There are several plans being proposed, but at the heart of it is the plan to scrap the right to compensation, or at the very least, put a cap on the amount people can claim for minor whiplash injuries. This could see payouts cut to a maximum of £425 – a far cry from the average of £1,850 currently paid out for whiplash claims – and compensation would only be given with a full medical report showing proof of injury.
"For too long some have exploited a rampant compensation culture and seen whiplash claims as an easy payday, driving up costs for millions of law-abiding motorists," said Justice Secretary Elizabeth Truss. "These reforms will crack down on minor, exaggerated and fraudulent claims. Insurers have promised to put the cash saved back in the pockets of the country’s drivers."
Leading insurance firms, including Aviva and LV=, have pledged to pass 100% of savings on to motorists, and the savings could be marked. Who wouldn’t want £40 instantly cut from their car insurance premium?
The move has been welcomed by the industry, with James Dalton of the Association of British Insurers (ABI) saying that the rules will "help create a more honest system that doesn’t reward those who want to exploit it", and could "ease some of the pressure recent increases in Insurance Premium Tax and repair costs are already putting on premiums".
We all know that the cost of car insurance has been on the rise of late, so these new proposals couldn’t come at a better time. However, it’s important to remember that these rules are still being consulted on, so while everyone in the industry is pushing for the reforms to be implemented, there’s no set date of when they’ll actually go through – which is why you’ll still need to be proactive to get the best deal!
It may be a while before you can get an instant £40 off your premiums, but there could still be savings to be made – you just have to get out there and look for them. Use our car insurance comparison tool to get started, and see if you can get a better deal.