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New reforms to cut car insurance premiums and whiplash compensation

The UK government has unveiled new rules to cap whiplash compensation payments, and a ban on offers without a medical report, in its Prisons and Courts Bill.

23 FEB 2017 | CHRIS SEEKINGS
“Honest motorists paying the price for "unnecessary whiplash claims" ©iStock
“Honest motorists paying the price for unnecessary whiplash claims" ©iStock

This is hoped to reduce car insurance premiums by approximately £40 a year, which are currently at a four-year high after increasing by 11.7% over 2016.

Government research shows that there has been a 50% increase in the number of whiplash claims over the last decade, despite a fall in the number of road accidents, resulting in the UK being known as the whiplash ‘capital’ of the world.

LV general insurance claims director, Martin Milliner, said: “Honest motorists and businesses should not have to keep paying the price for unnecessary whiplash claims - and today's bill goes some way to ensuring that they won't have to.

“We look forward to working with the government to deliver these much needed changes to a system that has been ripe for misuse for too long, and will make good on our promise to hand back any savings to honest customers through lower premiums.

“We will be holding the government to account on the promised timelines for reform, to ensure that the bill is passed without delay, enabling consumers to get a fairer deal as soon as possible.”

The bill also includes an increase in the small claims limit for road traffic injury claims to £5,000 and £2,000 for all other personal claims.

However there are concerns that by doing this, victims of serious injuries may have to bring forward cases themselves, as small claims courts are designed to be used without the need for a solicitor.

A Law Society spokesperson, said: “The government is treating injuries that would be regarded as grievous bodily harm in the criminal courts as small claims.

“A limit of £5,000 will mean injuries including facial scarring, fractured ribs, a bruised chest and whiplash to the neck would be considered as ‘small claims’. This means people will be forced to bring claims themselves without expert legal advice.

“The narrative accompanying these proposals has always sought to make the link with stopping fraudulent claims. But these proposals are not, as repeatedly stated, about that at all.

“Fraudulent claims are repellent but they should be dealt with by targeting the fraudsters - not the vast majority of honest claimants who have been injured and bring genuine claims.”