The UK government has announced it will be introducing new measures in an attempt to cut down on dubious whiplash claims, and in the process reduce car insurance premiums.
The plans will see fixed amounts of compensation set for whiplash insurance claims, and a ban on the practice of settling whiplash claims without the provision of authenticated and professionally dispensed supporting medical evidence.
These new measures are set to create around £1 billion in savings for insurance companies, and insurance providers have committed to passing these savings on to drivers. The saving will equate to approximately £35 a year for each driver.
After the bill’s announcement, the leaders of 26 insurance companies signed a letter addressed to the British Lord Chancellor, David Gauke, outlining a pledge to pass the cost benefits created by the measures on to their customers. The letter’s 26 signatories form 86% of the UK’s motor and liability market. The letter states:
“In the UK’s fiercely competitive insurance market, each individual insurer will continue to make their own independent decisions on pricing in order to remain competitive. Indeed, such independent decision-making is a requirement of applicable competition law.
“However, the signatories to this letter today publicly commit to passing on to customers cost benefits arising from Government action to tackle the extent of exaggerated low-value personal injury claims and reform to the personal injury discount rate.”
Huw Evans, director general of the Association of British Insurers (ABI), said of the proposals:
“People and businesses are paying more for their motor insurance than ever before and we need changes to the law to tackle some of the root causes. Soft tissue injury claims have been rising year on year since 2014 as cold calling claims firms have thrived, driving up the cost of insurance. It is now important that Parliament agrees these proposals swiftly so people across England and Wales can start to see the benefits.”
The complete letter and a full list of all its signatories is available to read and has been published on the ABI website.