Insurers to pass on 100% of whiplash savings, says MoJ

Topics: Personal injury & clinical negligence,Government & politics

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  • James Dalton

Leading motor insurers have promised to pass on to customers 100% of the savings they make from curbs on whiplash claims, the government announced today.

A Ministry of Justice press release said the move would cut annual insurance premiums by around £50.

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According to the statement, the agreement to pass on savings follows 'a recent roundtable meeting' to discuss the announcement in last month's autumn statement that the government would end the right to cash compensation for minor whiplash injuries and raise the upper limit for personal injury claims in the small claims track from £1,000 to £5,000.

The measures will be introduced 'as soon as possible', the ministry said. Detail of the measures, which are opposed by the Law Society, will be consulted on early next year.  

Justice minister Lord Faulks said insurers had promised to pass on the money saved by the curb on claims as quickly as possible.

'We are determined to crack down on the culture of fraud and exaggerated claims in the motor insurance industry, which means car owners are forced to pay higher premiums to cover the false claims of others. This culture is boosted by an industry that encourages exaggerated claims through cold calling and it is right that we tackle this. Insurers back these much-needed reforms and have committed to handing over savings to motorists quickly.'

James Dalton (pictured), director of general Insurance at the Association of British Insurers, said: 'The government reforms are a significant breakthrough in tackling the UK’s compensation culture and are good news for motorists.

'Reforms to the small claims track limit and the end to cash compensation, for low value injuries, will help to bring down unnecessary costs in the motor insurance market and honest motorists should be the beneficiaries.'

The MoJ announcement quotes insurers Aviva and LV= as pledging to pass on all savings to customers. 

Readers' comments (43)

  • Yes I see, stil hanging their proud hats on only TWO insurance companies then?

    The Government and the Insurance companies ought to be spending their time coming up with ideas to encourage people to make sure that they get car insurance, not dissuade them

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  • ......and we ALL believe what the ABI say Coz they always tell the truth and NEVER try and get away without paying. Pass me my shotgun, there is a pig flying over my land !!!

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  • This appeared on both the BBC and Sky News, on a bank holiday and no comment from TLS/APIL/MASS. Our PR must meet the ABI's head on and not merely be 9-5 Mon to Fri.

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  • I'm sure the insurance companies will be happy to reveal whether or not they pass on people's details after accidents, and that this will feature as part of the solution to tackling so-called fraud..?

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  • We heard this before in about 2012/3 when they were saying whiplash added £90.00 to a motor policy premium and that reforms planned then would reduce premiums accordingly. Of course they didn't and the insurers won't reduce them this time either. They just lie through their teeth, but the Government falls for it every time.

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  • Actually Dalton said that it was an end to automatic compensation for whiplash injury and the publicly funded BBC repeated that mistake every 20 minutes. Fundementally dishonest state of the law in the UK Dalton and you know it but for it to have been repeated is a travesty. The BBC are not interested in another view

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  • Thats nice to know.

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  • Sorry if this is a stupid question BUT anywho....Can somebody please clarify this for me. Is there to be a Two Tier System now for Small Claims matters then? only I have not read of such myself and this all seems to be rather a haphazard. i.e. will there be £1000 for all general small claims and £5000 for all Car Insurance claims?

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  • The proposals are no "small" whiplash claims, all other injury claims where the value of the injury is below £5k will be SCT

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  • Thank You JB

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