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| Whiplash plans to 'cut car insurance premiums by £40' | Whiplash plans to 'cut car insurance premiums by £40' |
| (about 1 hour later) | |
| Millions of motorists could see their car insurance premiums reduced as a result of plans to cut compensation for whiplash injuries. | Millions of motorists could see their car insurance premiums reduced as a result of plans to cut compensation for whiplash injuries. |
| Whiplash claims have risen by 50% over the last decade, costing insurance companies about £1bn a year. | Whiplash claims have risen by 50% over the last decade, costing insurance companies about £1bn a year. |
| The government said insurers have pledged to pass on the savings, worth about £40 a year. | The government said insurers have pledged to pass on the savings, worth about £40 a year. |
| Following a promise made last year, ministers are looking at scrapping the right to compensation or capping it. | Following a promise made last year, ministers are looking at scrapping the right to compensation or capping it. |
| In its consultation, the Ministry of Justice suggests that such payments - which are separate to medical bills or loss of earnings - could be banned. | In its consultation, the Ministry of Justice suggests that such payments - which are separate to medical bills or loss of earnings - could be banned. |
| Or they could be capped at a maximum level of £425. By contrast the current average pay-out is £1,850. | Or they could be capped at a maximum level of £425. By contrast the current average pay-out is £1,850. |
| 'Better deals' | 'Better deals' |
| The government pointed out that while the number of road accidents in the UK has been falling, the number of whiplash claims has been increasing. | The government pointed out that while the number of road accidents in the UK has been falling, the number of whiplash claims has been increasing. |
| "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," said Justice Secretary Liz Truss. | "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," said Justice Secretary Liz Truss. |
| "These reforms will crack down on minor, exaggerated and fraudulent claims." | "These reforms will crack down on minor, exaggerated and fraudulent claims." |
| Other proposed measures include: | Other proposed measures include: |
| The Association of British Insurers (ABI) welcomed the consultation. | The Association of British Insurers (ABI) welcomed the consultation. |
| "These reforms are important. They will help to give honest motorists a better deal," said an ABI spokesperson. | "These reforms are important. They will help to give honest motorists a better deal," said an ABI spokesperson. |
| Nuisance calls | Nuisance calls |
| The insurance industry has been complaining about the issue of whiplash claims for at least eight years. | The insurance industry has been complaining about the issue of whiplash claims for at least eight years. |
| And the government has tried to crack down on fraudulent injury claims before. | And the government has tried to crack down on fraudulent injury claims before. |
| Under the Legal Aid, Sentencing and Punishment of Offenders Act 2012, so-called "no win, no fee" legal actions were curtailed, and referral fees were banned. | Under the Legal Aid, Sentencing and Punishment of Offenders Act 2012, so-called "no win, no fee" legal actions were curtailed, and referral fees were banned. |
| Following that law, whiplash claims fell by 19%, but it remains to be seen how effective any further measures might be. | |
| Nevertheless, one of the UK's largest insurance companies, Aviva, has promised to pass on 100% of any savings to motorists. | Nevertheless, one of the UK's largest insurance companies, Aviva, has promised to pass on 100% of any savings to motorists. |
| The insurer said the measures might also help to discourage nuisance calls and texts from claims management companies. | The insurer said the measures might also help to discourage nuisance calls and texts from claims management companies. |
| "This is welcome news for consumers who are rightly fed up with nuisance calls, fraud such as crash for cash, and the huge number of spurious whiplash claims they pay for in their premium," said Rob Townend, claims director at Aviva. | "This is welcome news for consumers who are rightly fed up with nuisance calls, fraud such as crash for cash, and the huge number of spurious whiplash claims they pay for in their premium," said Rob Townend, claims director at Aviva. |
| "These proposals bring us a step closer to saying good riddance to the 'whip-cash' merry-go-round that is the bedrock of the UK's compensation culture." | "These proposals bring us a step closer to saying good riddance to the 'whip-cash' merry-go-round that is the bedrock of the UK's compensation culture." |
| 'Broken system' | |
| Amanda Blanc, the chief executive of insurance firm AXA UK, also called for the government to push ahead with the reforms. | |
| She said: "We have been here before and still not yet managed to beat the whiplash epidemic. | |
| "This is a golden opportunity for the government to tackle the compensation culture once and for all." | |
| And the RAC motoring group's director of insurance, Mark Godfrey, said the plan was "broadly welcome... The present system is now widely regarded as broken and in need of reform". | And the RAC motoring group's director of insurance, Mark Godfrey, said the plan was "broadly welcome... The present system is now widely regarded as broken and in need of reform". |
| But he added: "It is crucial that motorists that have genuine claims are not disadvantaged, which is why we now look forward to seeing the finer detail of the government's proposals." | But he added: "It is crucial that motorists that have genuine claims are not disadvantaged, which is why we now look forward to seeing the finer detail of the government's proposals." |
| Any changes would require an act of parliament, so are likely to be many months away. | Any changes would require an act of parliament, so are likely to be many months away. |