Whiplash: New rules to crackdown on fraudulent insurance claims

The government is promising more than £1bn in savings for motorists, as new rules on car insurance claims for whiplash come into effect in England and Wales on Monday.

The aim is to cut the high numbers of fraudulent road accident claims.

The new rules will enable insurers to cut premiums for millions of drivers by about £35 a year, say ministers.

The reforms will also include a simplified process for making accident claims online that are under £5,000.

Medical evidence will also be mandatory for all future whiplash claims.

The government says the UK has "some of the safest roads in Europe", with fewer crashes being reported year-on-year since 2013.

Yet road traffic accident claims are more than 40% higher now than in 2006.

It said more than 550,000 claims were made in 2019-20 alone, while there had also been an increase in exaggerated, fraudulent and embellished claims.

Insurers have pledged to pass on the savings to motorists - worth a total of £1.2bn, the Ministry of Justice added.

"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," said Lord Chancellor Robert Buckland.

"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."

The new digital portal will enable motorists to make a claim for any road traffic-related personal injury valued at under £5,000, including claims for whiplash.

The idea is to do away with the need for expensive lawyers, so claimants can settle their own affairs.

It is intended that a majority of road traffic accident claims should be dealt with using the portal in future.

The new rules also include increasing the track limit for personal injury small claims related to road traffic accidents, from £1,000 to £5,000.

This means that a majority of all claims will be processed in the cheaper small claims track, where legal costs are not recoverable.

Motorists will need to submit medical evidence to the portal before any settlement can be made.

"There are almost as many lurid headlines about whiplash claims as there are claims themselves," said Steve Gooding, director of the RAC Foundation.

"This new system should mean legitimate cases are easier and quicker to deal with, fraudulent claims are more likely to fail and all drivers benefit from decreases in their insurance premiums."