WHIPLASH COMPENSATION CUTS COULD KNOCK £40 OFF CAR INSURANCE PREMIUMS
Over the past decade whiplash claims have risen by 50%, and cost insurers around £1 billion per year. Now millions of motorists could see their car insurance premiums reduced because of government plans to cut compensation for whiplash injuries.
Currently, the average pay-out for a whiplash claim – which is separate from medical bill or loss of earning pay-outs – is £1,850. The Ministry of Justice has suggested that the right to compensation for such claims could be scrapped completely, or capped at a maximum of £425.
Whilst the number of road accidents in the UK has been falling, the number of whiplash claims is on the rise. The government crackdown will target minor, exaggerated and fraudulent claims, which the Ministry of Justice called “toxic” and an “epidemic”.
Justice Secretary Liz Truss said: “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.”
The government has said insurers have pledged to pass on the savings made, which could reduce premiums by around £40 a year.
A recent rise in ‘crash for cash’ scams, where accidents were either staged by criminal gangs or never happened at all, may well have been spurred on by the current system which arguably makes claiming for minor whiplash injuries easy.
An Association of British Insurers (ABI) spokesperson confirmed the organisation was happy with the plans, saying: “These reforms are important. They will help to give honest motorists a better deal.”