Drivers will save up to £35 a year on car insurance under new whiplash injury laws that come into force today.
Under new rules, victims will be able to make claims without resorting to expensive lawyers, saving policymakers thousands in legal costs and stamping out fraudulent claims that drive up premiums.
An online portal will enable car accident victims to make claims for whiplash directly up to a value of £5,000, using a new fixedrate scale based on the length of time they suffered symptoms.
According to the Ministry of Justice, the changes, which take effect on Monday, will mean anyone suffering whiplash symptoms for up to three months, for example, will get a fixed-rate payout of £260, instead of the previous average of £1,500 to £1,600.
Settling payouts without medical evidence will also be banned in an effort to prevent fraudulent claims that have cost the industry tens of thousands of pounds.
It is hoped that the reforms will reduce the 550,000 whiplash claims a year, with insurers vowing to pass on the estimated £1.2billion savings to drivers - equivalent to £35 per motorist.
Road accident claims have risen by more than 40% since 2006 despite the number of accidents falling every year since 2013.
The Ministry of Justice said this has been fuelled by an increase in exaggerated and often disproportionate claims, which is having an expensive knock on effect on premiums.
Robert Buckland, the Justice Secretary, said: "For too long the system has been open to abuse by individuals looking for an easy payday - with ordinary motorists paying the price. Our changes will put an end to this greedy opportunism and ultimately see savings put back into the pockets of drivers."
The new tariff system offers a staggered increase in compensation claims, starting at up to £260 for suffering symptoms for up to three months, £520 for three to six months, £895 for six to nine months, and peaking at £4,345 for 18 months to two years.
Steve Gooding, director of the RAC Foundation, said: "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."
What are the changes?
- The reforms will include a simplified process for making accident claims that are under £5,000. All claims will now have to be made online.
- Insurers won't need to pay for legal costs to cover whiplash claims - this will help drive prices down for motorists in the long run.
- Medical evidence will now be mandatory for all whiplash claims. The new online portal won't let you raise a claim without evidence.
