Curb on whiplash claims to cut £40 from drivers’ insurance

EVERY motorist in England and Wales will see their insurance premiums fall by £40 a year under plans to end the “epidemic” of whiplash claims, the Justice Secretary has said.

Liz Truss warned that the “rampant culture of compensation claims” is pushing up the premiums of millions of “law-abiding” motorists.

She will today publish a consultation paper which will promise to either ban minor whiplash claims or cap payments at £425, while new tariffs will limit payouts for more serious whiplash injuries.

Insurers have said they will pass on the full savings, which the Government estimates total more than £1 billion, to motorists in the form of lower premiums.

Ms Truss said: “These reforms will crack down on minor, exaggerated and fraudulent claims.

“Insurers have promised to put the cash saved back in the pockets of the country’s drivers.” More than 1,500 claims for whiplash are made every day, equivalent to one every 60 seconds, raising concerns that a “cash for crash” industry has developed.

The average payout for a road traffic personal injury claim last year was £1,850.

The AA, Britain’s biggest motoring organisation, said it welcomed the consultation. The Association of British Insurers, the industry body, said the plans would lead to cheaper insurance premiums for motorists.