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Car insurance – whiplash claims to be cut

The Government plans to crack down on false whiplash claims said to add an extra £90 to every car insurance policy.

Image by Highways Agency

New plans have been unveiled to reduce the number of whiplash claims in England and Wales, with figures showing a 60% rise in personal injury claims related to road accidents since 2006, despite vehicles becoming safer and a 20% reduction in the number of reported accidents over the same period.

It is estimated that whiplash claims cost £2 billion in 2010 or £90 per policy.

Current system ‘open to abuse’

While genuine claims will still be able to go ahead, exaggerated, misrepresented or fraudulent claims are set to be more robustly challenged.

The Government will also consult on options to allow more whiplash cases to be challenged in the small claims court and to change the current position where it can be cheaper for insurance companies to accept questionable claims than to contest them.

Justice Secretary Chris Grayling stated: “For too long honest drivers have been bearing the price of a system that has been open to abuse and it is time for that to change.

“We are proposing action to support effective whiplash diagnosis by medical experts and to simplify procedures which will help bring speculative or fraudulent claims before a judge – so genuine claims can still be settled but fraudsters are left in no doubt there will be no more easy paydays.”

Honest drivers need protection from ‘whiplash epidemic’

James Dalton, head of motor and liability at the Association of British Insurers, said: “We are pleased that the Government recognises that tough action is needed to protect honest motorists from the UK’s whiplash epidemic.

“For too long, whiplash has been seen as the “fraud of choice”. Our roads are safer, yet every day over 1,500 whiplash claims are made. These claims add an extra £90 a year to the average motor insurance premium.

“More effective diagnosis of whiplash will help genuine claimants get paid out quickly and reduce the scope for fraud, so helping to ensure that honest motorists do not end up footing the bill for the cheats through higher insurance premiums.”

The new plans will complement law changes due to come into effect in April 2013.