In November 2016, the Ministry of Justice published “Reforming the Soft Tissue Injury (whiplash) Claims Process. A consultation on arrangements concerning personal injury claims in England and Wales”. The government published its responses to the consultation in February 2017 and the crack down on fake whiplash claims even made it into the Queens speech in June 2017. If you’re not sure what this means and how it might affect you, this blog gives you an easy break down of the new reforms and how they are likely to affect your car insurance premium.
The average cost of car insurance is at an all-time high according to comparethemarket.com, with the average policy set to reach £800 this year. This is a 14% increase on 2016 and £200 more than in 2015.
The whiplash reforms are a measure to deter minor claims or exaggerated and fraudulent whiplash claims, saving the insurance industry a projected £1bn a year and drivers an expected £40 per year on their car insurance.
However, due to an increase in the rate of insurance premium tax, insurers seem to be unable to pass those savings on.
The changes to how whiplash pay outs are calculated are due to come into effect in 2018, and will introduce a fixed amount payable for injuries lasting less than 2 years, reducing the amount of compensation you will be entitled to should you suffer a whiplash injury through a road traffic accident.
The changes will also reduce the amount the insurer has to pay in costs for the claim by increasing the Small Claims Track Limit from £1000 to £5000 for road traffic accidents. That means all cases under £5000 will be considered small claims for road traffic accidents. More motorists in general may be expected to go through the small claims court rather than using a solicitor for car accident claims.
The changes also mean insurers will not be able to offer a settlement without an independent medical assessment of the claimant.
Whiplash as an injury has its fair share of sceptics but it is actually a shorthand way of referring to soft tissue damage in your neck and upper back, following a sharp jolt. We talk about it in more detail on our whiplash claims page here. For some, it can mean months of reduced mobility and pain and in rare cases can develop into a lifelong injury. The proposed tariffs will mean that on average, those who have suffered a whiplash injury through a road traffic accident will be entitled to claim much less compensation than they have been able to previously.
The compensation system in this country exists to ensure that you have an avenue to seek damages for events beyond your control that go on to affect your day to day life. Unfortunately, some people have abused this system by making fraudulent claims, or worse, have engineered crashes in the hopes of then making a compensation claim.
In 2014/15, 75% of road traffic accident claims were whiplash claims, which is the most common injury following a crash. But reducing the amount of compensation a person can claim if they suffer from whiplash following a crash, the government hopes to make fraud a less attractive prospect.
The proposed tariffs see a minimum claim of £225 for an injury lasting 0-3 months and compensation capped at £3725 for an injury lasting 2 years. These caps will mean that, for many, it may be necessary to act for on your own behalf in the event of a small claim. This means many who are entitled to claim compensation may choose not to, without a solicitor to help navigate the process.
The 3 year statute of limitations prevents people from making any compensation claims for a car collision more than 3 years after it happens. This means that those who suffer with their whiplash injury longer than 2 years can claim before the time limit has run out and the tariffs will not apply, although it is unlikely that claimants will be able to make their claim in such a short time window.
The proposed changes have had mixed reactions, while insurers have pledged to pass on all savings to their customers, it is estimated that this will save motorists only £40 a year, while those who lose earnings through a genuine whiplash injury could see a reduction of the compensation they are entitled to receive by thousands.
Average car insurance in the UK for comprehensive cover is £484 a year, according to the Association of British Insurers (ABI). That is roughly £40 a month. Insurers are expected to pass on savings of £40 a year, which would be roughly saving motorists £3.50 a month.
Director of personal injury, Alison Saul, said this of the reforms:
“There are many people injured in accidents each year through no fault of their own and the circumstances will be different in each instance. Our team has extensive experience of successfully managing a wide range of personal injury claims, so we can help you secure the maximum compensation you deserve.”
Despite the reforms, motorists needn’t worry. You will still be able to submit a claim if you are injured in a car accident and our expert team, will continue to represent innocent motorists who have been injured through no fault of their own.
If you are unsure if you should make a claim following a traffic accident, our telephone advisors will be able to advise you on your situation, or you can read more on whiplash claims here.