Drivers will gain as the whip is cracked on fraudulent motor insurance claims
In the Autumn Statement, the Chancellor announced further reforms to tackle the growing compensation culture
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Your support makes all the difference.There was some good news that drivers may have missed in the Autumn Statement; it could lead to a £40 to £50 reduction in the cost of motor insurance.
The Chancellor announced further reforms to tackle the growing compensation culture – specifically, fraudulent whiplash injury claims. These have become a big problem both for insurers and for honest motorists who end up having to pay through higher premiums.
It is worth noting that the UK currently holds the unwanted title of being the whiplash capital of Europe. Around 80 per cent of road accident personal injury claims involve whiplash, compared with just 3 per cent in France.
So it's welcome news that the Government plans to introduce measures to end the right to cash compensation for minor whiplash claims; there will be a full consultation on that in the new year. It also plans to reform legal costs by transferring personal injury claims of up to £5,000 to the small claims court.
How will this affect you? Huw Evans, director general of the Association of British Insurers, said: "Previous government reforms have already led to insurers passing on more than £1bn worth of savings to motorists through lower premiums."
The same is likely to happen with the new reforms. Aviva, for instance, has already pledged to pass on 100 per cent of the savings – which the insurer calculates as around £40 to £50 per driver –as soon as the changes come into effect. The bad news? Because of the consultation period, you are unlikely to benefit until 2017.
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