Government clampdown on whiplash fraud could cut insurance by £40.00

possible-whiplashMillions of motorists can look forward to cheaper car insurance premiums thanks to new government plans to cut bogus compensation claims. The UK has become known as ‘the whiplash capital of the world’ and it’s a nickname that the government and the insurance industry are keen shake off.

The number of whiplash claims has doubled in the last decade despite a halving in the number of road traffic accidents. More than 1,500 whiplash claims are made every day (that’s one every sixty seconds) costing the insurance industry an estimated £1billion a year. Clearly something is going very wrong and honest motorists are left to pick-up the bill.

In 2012 the government took measures to crackdown on whiplash fraud by banning referral fees which lead to a 19% drop in whiplash fraud, but in recent years the number of bogus claims has begun to climb.

The Department of Justice has published a consultation paper outlining the measures which include:

  • Scrapping cash compensation other than for medical expenses (such as physiotherapy) and loss of earnings
  • Alternatively, minor claims may be capped at £425 which is considerably less than the current average payout of £1,850
  • Capping payouts for injuries lasting 12 months at £1,100 and injuries lasting 24 months at £3,500
  • An independent medical report detailing physical harm will be required for all whiplash claims to proceed
  • Raising the Small Claims Court threshold from £1,000 to £5,000 to discourage expensive legal representation.

Commenting on the package the Justice Secretary Liz 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. These reforms will crack down on minor, exaggerated and fraudulent claims.”

The measures have been warmly welcomed across the board, and the best bit is that insurers have pledged to pass-on 100% of the savings to their customers.

Quoteline Direct is an independent insurance broker with nearly half a century’s experience. We’ve got access to some seriously competitive policies from some of the biggest names in the business, and you’ll have to go a long way to get a better car insurance deal.


One Response to “Government clampdown on whiplash fraud could cut insurance by £40.00”

  1. Jonathan says:

    Not a victimless crime. Whiplash fraud is costing us on average an extra £90 a year. When anyone is caught out, damages should be counter claimed by the medical and insurance services and the perpetrators named and shamed.

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