Whiplash plans to 'cut vehicle insurance premiums by £40'

Whiplash plans to 'cut vehicle insurance premiums by £40'

The consultation, which runs until January 6 2017, could see a cap put on the amount people can claim, or scrap the right to compensation altogether.

The Ministry of Justice (MoJ) hopes that this will put an end to notorious crash for cash claims, savings motorists £1 billion a year.

Worryingly, the same survey shows that 11% of drivers said that they saw nothing wrong with making a claim for injury compensation, even if no injury was actually suffered.

Capping compensation would see the average pay-out cut from £1,850 to a maximum amount of £425. Other suggested reforms included requiring medical reports from an accredited expert for the payment of compensation and introducing a tariff system for injuries more serious than whiplash.

The reforms, which were originally announced by the then Chancellor during last year's Autumn statement, were billed as controversial as they sought to end the compensation culture in the United Kingdom, but were seen by some as an all-out attack on victims for the benefit of the insurance industry.

The Government body is blaming the rise on a "predatory" industry that encourages motorists to submit minor, exaggerated or fraudulent claims, saying that the cost of settling such claims is driving up insurance premiums for everyone.

Economic secretary to the Treasury 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".

"The need to produce medical evidence means that whiplash claims are no longer an easy and profitable for the "no win, no fee" market".

The cost has surged by 16.3 per cent over the past year, adding almost £82 to a typical policy.

Instead, claimants would need a doctor's report before being paid. 'In particular, we anticipate an outcry from those who deal with injury claims outside of the whiplash space who will be affected by the proposal to increase the small claims limit for all personal injury claims, ' he said.

Paul Geddes, chief executive officer at Direct Line Group, an insurer backing the scheme, said: "We are very pleased that the Government has finally published the consultation paper on whiplash reform".

James Dalton, director of general insurance policy at the Association of British Insurers (ABI) said: "Introducing a range of measures, such as limiting the compensation payable for these injuries, will help create a more honest system that doesn't reward those who want to exploit it".

The recommendations were welcomed by the insurance industry.

Research by AA Insurance previous year suggested one in ten drivers thought it was acceptable to make a insurance claim for an injury following a collision, even if no harm was suffered.