You are here: Home - Insurance - News -

Drivers to save £35 as new whiplash rules take effect

0
Written by: Emma Lunn
01/06/2021
Motorists across England and Wales will save up to £35 a year on their insurance premiums due to changes to whiplash rules which aim to put an end to fraudulent injury claims.

The reforms came into effect yesterday (31 May) and will result in combined savings of more than £1bn for motorists.

The changes are designed to reduce the high number of whiplash claims made each year, with more than 550,000 in 2019/20 alone. Insurers have pledged to pass on the savings these reforms will create to drivers – worth a total of £1.2bn.

From today, drivers can use a new digital portal to make a claim for any road traffic related personal injury valued at less than £5,000, including claims for whiplash. This means claimants can settle their claim without the use of a lawyer if they wish. It is anticipated that the majority of road traffic accident claims will use the portal in future.

The small claims track limit for road traffic accident-related (RTA) personal injury claims has been increased from £1,000 to £5,000. Therefore, the majority of all RTA-related claims will now proceed through the cheaper small claims track where legal costs are not recoverable. In most cases this will spare motorists court appearances, fees and legal costs.

A new fixed tariff of compensation for whiplash injuries sets out how much can be claimed for an injury, depending on how long it impacted the claimant. The government says the tariff will give claimants “clarity, predictability, and certainty” about how much their claim will be worth, while ensuring costs are controlled and that compensation is proportionate to the injury suffered.

Despite fewer road crashes being reported year-on-year since 2013, road traffic accident claims are more than 40% higher than in 2006. This has been fuelled by a reported increase in exaggerated and often disproportionate claims, driving up the costs of insurance premiums for ordinary motorists.

Robert Buckland QC, the lord chancellor, said: “For too long the system for making whiplash claims has been open to abuse by individuals looking for an easy payday – with ordinary motorists paying the price.

“Our changes, which come into force today, will put an end to this greedy opportunism and ultimately see savings put back into the pockets of the country’s drivers.”

Dominic Clayden, chief executive of Motor Insurers’ Bureau (MIB), said: “We are pleased to have delivered on our remit to build a service that meets the requirements of these important policy changes.

“MIB’s focus has always been about making sure the new legal process is as easy and straight forward as possible for anyone who might need to make a claim. To make sure the service works well for everyone we will continue our work with the Ministry of Justice to listen to feedback and to make further enhancements.”

The reforms are part of measures contained in part 1 of the Civil Liability Act 2018.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

Low-income pensioner? You could gain £3k top-up

Hundreds of thousands of retirees struggling with a low income are missing out on Pension Credit worth £3,300...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week