Reducing the maximum payout following whiplash injuries will trim premiums

The 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.

Justice secretary David Gauke has revealed intentions to introduce a civil liability bill through the House of Lords that proposes changes to the way that whiplash claims are valued and paid out.

An estimated £1 billion reduction in payouts would equate to saving of around £35 per premium for each UK motorist. Figures released ahead of the bill's proposal suggest a decrease in average payouts following a whiplash injury from £1850 to £425 would enable the saving.

The new rules would prevent compensation payouts unless a medical report was provided as proof of injury. Currently, claims can be made without evidence. It's estimated that one whiplash claim is paid out every minute in Britain.

“We are putting this right through this important legislation, ensuring whiplash claims are no longer an easy payday," said Gauke. "The bill will seek to set fixed amounts of compensation for whiplash claims and the halt the practice of settling whiplash claims without medical evidence.”

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Insurers have long called for changes. Former justice secretary Elizabeth Truss said back in 2016 that exploitation and "a rampant compensation culture" was to blame for the surge in whiplash claims, which has contributed to a 50% increase in payouts compared with a decade ago. “Reforms would crack down on minor, exaggerated and fraudulent claims," said Truss.

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

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New figures produced by leading car insurance comparison website show that car insurance premiums rose by 8% last year, which, although representing a 1% reduction in growth compared with the year before, illustrates the pace of premium increases suffered by motorists.

"Our research shows that the average premium is now at an astonishing £827," said a spokesman for the brand in reference to customers of 

Figures produced by the Association of British Insurers show that the wider market premium average is now £481, a 9% increase on last year.

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Join the debate


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.

21 March 2018

It would be interisting to see the demographics on this type of claim seeing as alot, if not the majority are made fraudulently.

21 March 2018
As if premiums will come down! April 1st has come early!

23 March 2018

At least insurance companies are now showing what you paid the previous year, so you can see how much more they're expecting you to cough up before they give you the privilege of insuring you for another year. I changed companies this year simply because I couldn't see the reason for any increase and told them so when I phoned them to say I wouldn't be renewing. Until I added TPS on my phone I had calls from companies convinced I'd had a recent accident and that they were prepared to handle any claim. I always told them this was incorrect, but presumably some people feel it's worth a punt for free money. I'll look forward to the £35 saving next March when I next buy insurance, although I feel any potential saving will mysteriously disappear.

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