Reducing the maximum payout following whiplash injuries will trim insurance premiums by £40
Sam Sheehan
17 November 2016

The UK government has announced plans to crack down on expensive whiplash claims, with the potential outcome being a reduction in insurance premiums totalling £1 billion a year.

This £1bn reduction would equate to saving of around £40 per premium and would be possible thanks to a proposed decrease in average payouts following a whiplash injury from £1850 to £425. Compensation would only be paid out if a medical report was provided as proof of injury. Currently, claims can be made without evidence.

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.

Car insurance premiums rise by 16.9% in a year, says AA

“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.”

Certain insurers, such as Aviva and LV, have pledged to pass 100% of the savings associated with the changes onto motorists.

“One whiplash claim is paid out every 60 seconds and it is unacceptable that responsible motorists have to pick up the tab,” said sconomic secretary Simon Kirby.

“We are tackling the incentives that have created this compensation culture so all drivers can save money on their motor insurance policies.”

According to the latest AA British Insurance Premium Index report, the annual premium paid rose by 9% in the third quarter of 2016 compared to the same period in 2015. The average premium paid in the third quarter of 2016 was £440.

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2

18 November 2016
I think they need to crack down on the number of companies who harrass people after an accident. I had a minor accident last year when someone changed lanes on a roundabout and hit me. Since then, I have had around 30 calls where they all say I must have suffered wiplash, and are entitled to compensation. I didn't have any, and they insisted that I must have.

18 November 2016
superstevie has it right. I would suggest most claims are bogus.
My wife's car was side scraped by a lorry, and for months she was hassled to make a personal injury claim, though she was not hurt.
A friend had a minor accident when a car ran into the back of his, and his insurance company appointed an accident management firm who hassled him to make a whiplash claim, which he refused.
Another friend had stopped in a car park when the driver in front stopped as she saw a vacant space, then reversed having not seen him - the cars met. His car had a scratched bumper and wing, and hers had minor scratches on the back bumper. She claimed whiplash as well and his insurance agreed to pay out 50/50! They then appointed lawyers who hassled him to make a whiplash claim too - for him and his passenger wife. They declined, as they were not even slightly jolted, and there was no way the other driver could have been.

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