The UK government has recently published a consultation paper to limit, or possibly even end the epidemic of whiplash claims. If these measures are passed into law, insurers have promised to pass on savings gained by capping the amount of money that can be claimed in whiplash injuries, resulting in an average saving of £40 each year for all forms of motor insurance, whether vehicles are private, commercial or on trade plates.
This is however not a new issue for the insurance trade. The motor trade has been complaining about whiplash claims for the years, as in the last decade whiplash claims have risen by nearly 50%. An average motor insurance policies on new and used cars have risen by a worrying 17% this year alone, this is due to whiplash claims costing insurance companies approximately one billion pounds!
There is now a whiplash compensation culture in place that has caused millions of driver’s insurance premiums to increase. While the number of traffic accidents in the United Kingdom has decreased in the last 15 years, the number of whiplash claims has drastically increased. There are now more than 1,500 whiplash claims made daily, with personal injury claims now topping 770,000 in 2016. At present, the average pay out for these claims is £1,850, but if the Government’s consultation paper becomes law, minor whiplash claims will be topped at £425.
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Other measures are also included in the consultation paper including small claims courts handling personal injury claims of up to £5000, therefore resulting in lower legal costs. If successful, claims will not be paid without expert medical reports and there will be a tariff system created for more serious whiplash injuries with a top limit of £1,100 for injuries that take up to one year to recover from, and £3,500 for injuries that take two years. However, all claimants would still be entitled to claim costs for physiotherapy and other treatments as a result of their whiplash injuries.
This, however, is not the first time that the Government has tried to put the brakes on the “cash for crash” culture. In 2012, an act of parliament banned referral fees and limited “no win, no fee” legal actions. This resulted in a 19% drop in whiplash claims. It is hoped that this consultation paper may finally end it altogether. There are worries however that genuine claims will struggle to get paid out and driver’s rights groups, including the RAC are awaiting more details of the government’s proposals. No changes will be made until the consultation paper becomes an act of Parliament which could be many months away, so for now at least, insurance premiums will be staying the same.