Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • November 2016
11

Plans to cut down on £1bn worth of whiplash car insurance claims

Open-access content Thursday 17th November 2016 — updated 5.50pm, Wednesday 29th April 2020

Motorists could see around £40 cut from car insurance premiums a year after the Ministry of Justice launched a consultation on proposals to reduce the high number of whiplash claims today.

2


There has been a 50% increase in the number of whiplash claims over the last 10 years despite a fall in the number of road accidents, leading to concerns that the industry is encouraging minor, exaggerated and fraudulent claims to drive up premiums.

Today's consultation paper outlines plans to scrap compensation unless a medical report is provided as proof, or put a cap on the amount people can claim for minor whiplash injuries, with insurers pledging to pass on the savings to drivers - worth a total of £1bn.

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."

There were over 800,000 small injury claims registered through the Ministry of Justice's small claims track last year, 750,000 of which are estimated to be whiplash injury claims, with one paid out every minute.

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."

The new measures include:

•    Introducing a transparent tariff system of compensation payments for claims with more significant injuries

•    Raising the limit for cases in the small claims court for all personal injury claims from £1,000 to £5,000

•    Banning offers to settle claims without medical evidence. All claims would need a report from a MedCo accredited medical expert before any pay out

•    Capping compensation which would see the average pay-out cut from £1,850 to a maximum amount of £425.

It is expected that these new proposals will decrease the amount of opportunist callers from claims companies asking members of the public about possible car accidents.

Consumer Intelligence chief executive, Ian Hughes, said; "The first thing drivers should notice is a reduction in nuisance calls from predatory claims companies.

"The need to produce medical evidence means that whiplash claims are no longer an easy and profitable for the "no win, no fee" market."

This article appeared in our November 2016 issue of The Actuary.
Click here to view this issue
Filed in:
11

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Senior Underwriting Risk Manager

London (Central)
£85K-£95K + Benefits
Reference
124386

Reserving Manager (Contract)

London (Central)
£1200 - £1400 per day
Reference
124385

Life Actuary - Contract - IFRS 17 Financial Impact

England, London / England, Bristol / North Yorkshire, England
£900 - £1150 per day
Reference
124384
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2022 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ