New bill could cut cost of your car insurance
Government plans tough measures on bogus whiplash claims
THE Government is introducing new measures to tackle insurance fraud that could save motorists £35 on the cost of their next policy.
The Ministry of Justice (MOJ) has unveiled a new Civil Liability Bill that aims to deal with the problem through tougher measures on fraudulent whiplash claims. It proposes new, fixed caps on claims, and banning the practice of seeking or offering to settle whiplash claims without medical evidence.
The Bill is expected to be enacted by April 2019 and includes changes to how the controversial Ogden personal injury discount is calculated. This is a percentage rate used to adjust compensation based on how much a victim could earn by investing payouts.
Last February, the Government lowered the Ogden rate from 2.5 per cent to minus 0.75 per cent, causing insurance premiums to rise by £75 on average. Now the MOJ is proposing to set the rate “to ‘low risk’ rather than ‘very low risk’ investments at present, better reflecting the evidence of the actual investment habits of claimants”.
Justice Secretary David Gauke said: “The number of whiplash claims has been too high for too long, and is symptomatic of a wider compensation culture.
“We are putting this right through this important legislation, ensuring whiplash claims are no longer an easy payday.”