Insurers have urged the UK Government to press ahead with its reforms to compensation for minor whiplash injuries, saying delays to it are costing motorists nearly £3m per day.
According to the Association of British Insurers (ABI), if the government delivers on its promises, then millions of honest motorists will get relief from the soaring motor insurance premiums driven by false claims.
Insurers said that ambulance chases and cold callers will be making fat cash at the cost of honest motorists if the Ministry of Justice gives in to their vested interests.
A statement from Chancellor George Osborne during the last Autumn Statement, revealed the government’s intentions to consult and implement crack down on fraud and claims culture in motor insurance. It also showed intent of ensuring that responsible motorists do not pay higher premiums to make up for the false claims by others.
However, nearly six months have gone by since plans were drawn up and yet the consultation paper about how to implement the reforms has not been finalized.
The ABI said earlier reforms introduced in 2013 saw £1bn in reduced costs passed onto customers, but cold callers have found new ways around the rules and the costs of personal injury claims are on the rise again.
It said the government’s proposals would cut out the incentives for those who want to rip off the system.
ABI director of general insurance policy James Dalton said: “The Ministry of Justice seems to be rowing back from much needed reform to the civil justice system that will save motorists up to £50 a year on average. The UK has one of the most abused systems in Europe and the reforms would tackle the excesses of the compensation culture.
"Without action, claims management companies will continue to nuisance call and text honest motorists encouraging them to make fraudulent and exaggerated claims through claimant law firms.
Responding to the report, RSA UK and Western Europe claims director Bill Paton said: “It’s almost a year since the Government pledged to crack down on the fraud and claims culture in motor insurance which has pushed up premiums for everyone. These punchy reforms came out of the Government’s own Insurance Fraud Taskforce recommendations, and it is disappointing to see them delayed.
"We believe these changes will be the accelerator which will result in the reduction in premiums for the ordinary motorist – and they cannot come soon enough.”
Should the government fail to deliver its promise, then an average motorist in the region is set to lose out £200 as a result with already insurance premiums moving up by 10% compared to the previous year.
Image : Delay in whiplash reforms is claimed to be costing UK motorists £3m a day as per ABI. Photo : courtesy of Para (talk | contribs) and commons.wikimedia.org.