The UK Government has unveiled plans to tackle the increasing numbers of fraudulent whiplash claims, which could allow motorists to save £40 per year on their car insurance policies
As part of it, the UK Ministry of Justice initiated a consultation on proposals for reducing the abnormally high number of whiplash claims, which in turn would allow insurers to lower premiums.
The UK government revealed that savings from preventing false whiplash claims account to £1bn which insurers have committed to pass on to drivers.
Despite having some of the safest roads in the continent and a decrease in number of accidents, the government said that whiplash claims have gone up by 50% compared to the last decade.
UK 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.
Kirby said: “We are tackling the incentives which have created this compensation culture so that all drivers can save money on their motor insurance policies.”
The government blamed the predatory claims industry for artificially raising the insurance premiums by encouraging minor, exaggerated and fraudulent claims.
To check the menace, the government has outlined its intentions to cancel the right to compensation or alternatively levy a limit on the claim amount for minor whiplash injuries in its consultation paper.
By putting a cap on compensation that can be paid, an average pay-out cut of £1,850 would come down to a maximum amount of £425, said the government.
It also added that compensation would only be paid out provided a medical report is submitted as injury proof.
UK Justice Secretary Elizabeth Truss said that some motorists have exploited an uncontrolled compensation culture since a long time, eyeing whiplash claims an easy way of earning, and in the process making insurance costs of millions of lawful motorists.
Truss added: “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.
The government is also looking to possibly implement other measures like a transparent tariff system, increasing the limit for cases in the small claims court and banning offers to settle claims without medical proof.
Image: UK Ministry of Justice launched crackdown on whiplash claims. Photo: courtesy of Crown copyright.