A cap on Whiplash claims could lead to cheaper car insurance
Published Date: 18th Nov 2016
The Ministry of Justice will carry out a consultation on the proposals to cut the current high number of whiplash claims going through, this will allow car insurance firms to reduce their premiums.
Current projections by the Ministry of Justice or MoJ could save the average car driver up to £40 a year and insurers have promised to pass on the savings if the new plans were to go ahead.
Ministers are calling the current whiplash claim rates an epidemic with claims now 50% higher than they were 10 years ago. The current compensation culture is blamed on a relentless claims industry that encourages people into claiming for small exaggerated injuries.
The MoJ will run the consultation period up to the New Year and will end on January 6th 2017, with initial plans to scrap the right to compensation or limit the amount people can claim for minor whiplash injuries.
This capping of the compensation would see the average payout for cut from £1850 down to a maximum of £425. Measures will also be put in place to see that claims would only be paid out if a medical report was provided as proof of injury.
Possible damage from Whiplash
Justice Secretary Elizabeth Truss said:
“For too long some have exploited a rampant compensation culture and seen whiplash claims an easy payday, driving up costs for millions of law-abiding motorists.
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”
The government’s commitment to tackle the whiplash epidemic has previously been welcomed by the Association of British Insurers (ABI), with leading insurance firms including Aviva and LV pledging to pass 100% of savings onto motorists.
Economic Secretary Simon Kirby said:
“One whiplash claim is paid out every 60 seconds and it is unacceptable that responsible motorists have to pick up the tab”
“We are tackling the incentives which have created this compensation culture so that all drivers can save money on their motor insurance policies”