Motorists could see their premiums drop from £ 35 to £ 40 per year if insurers passed on expected savings from a major overhaul of how road accident whiplash claims are processed.

The rule changes, effective May 31, will limit payments, require medical reports, and reduce legal fees by introducing a DIY claims portal for those making a claim.

Insurers say whiplash claims cost them – and policyholders to whom they pass the costs on – around £ 2 billion a year, around £ 90 per driver. Removing exaggerated and fabricated claims will result in savings estimated at £ 40 per policy.

Companies say they will reflect any savings from lower premium changes.

Claims for whiplash (injury to soft tissue caused by sudden movement of the head) have long been a source of controversy, especially since the number of claims has continued to increase despite improvements in vehicle safety and a long-term decline in the number of road accidents. .

Around 1,500 whiplash claims are made in the UK every day.

The insurance industry has consistently criticized claims handling companies for encouraging people to file claims. These companies are often remunerated with a percentage of the claims payment.

The government said of the rule changes: “The reforms will apply to low value injury claims resulting from a traffic accident, including whiplash. This means that claimants will be able to settle these small personal injury claims without having to go to court or be represented by a lawyer.

“From May 31, 2021, claimants will submit their claims using the Official Injury Claims Service. For applicants who do not have access to the online service or who cannot use it, assistance will be available through the portal’s helpdesk by calling 0800 118 1631. “

The measures of the Whiplash reform program include:

  • the introduction of a fixed rate of compensation exclusively for pain, suffering and loss of pleasure for whiplash claims up to two years. This rate, which is significantly lower than the current provisions, will determine the bodily injury claimants will receive for whiplash.
  • a ban on settling whiplash claims without medical evidence. The official injury claims service will allow claimants to obtain medical reports to ensure claims are supported by medical evidence prior to settlement.
  • changes in the way legal matters are handled so that parties are responsible for paying their own legal fees, rather than requiring the losing party to pay all costs associated with the case. Legal representations will now only be possible for claims valued at £ 5,000 or more, instead of £ 1,000.