Cash payouts for whiplash injuries can be banned

Car insurance bills could dropped up to 50 right after the government unveiled offers to ban cash payouts for whiplash claims.

Whiplash costs the industry around 2bn each year, as well as average of 90 per policy, “which has run out of all proportion to your genuine injury suffered,” government entities said.

In measures announced within the autumn statement, George Osborne said the government will consult on ending the authority to cash compensation for minor whiplash injuries.

“This will end the cycle whereby responsible motorists pay higher premiums to hide false claims by others,” the Treasury said. “It will remove over 1bn within the valuation on providing car insurance policy plus the government expects the insurance industry to feed the normal saving of 40-50 per motor insurance policy up on consumers.”

The average motor insurance premium in 2014 was 372, as outlined by figures from your Association of British Insurers, so a 50 cut equals a 13% fall in cost.

But you’ll find fears that this change can cause the tiny claims courts becoming clogged with whiplash cases instead.

It is unclear what amount of the benefit is going to be given to drivers. A couple weeks ago, accountants EY predicted that motorists faced an inflation-busting 8% improvement in the price of insurance buy, with many different insurance vendors unprofitable on current rates.

Reductions while in the price of whiplash may very well be offset by rate rises, leaving many motorists little more content.