Government reforms also promise to lift the upper limit for personal injury suits in small claims courts from £1,000 to £5,000
Drivers are in line for a £50 insurance bonus after ministers struck a deal to tackle fake whiplash claims.
Industry bosses are to pass on to hard-pressed motorists all the savings made as a result of measures to tackle crash-for-cash scams, it is revealed today.
The fraud clampdown promises to end the right to cash compensation for minor whiplash injuries and lift the upper limit for personal injury suits in small claims courts from £1,000 to £5,000.
James Dalton, of the Association of British Insurers, said: “The Government reforms are a significant breakthrough in tackling the UK’s compensation culture and are good news for motorists.”
He said it would “help to bring down unnecessary costs in the motor insurance market and honest motorists should be the beneficiaries”.
Labour MP Graham Stringer, who sits on the Transport Select Committee, said: “We have done a number of inquiries into this and there is no doubt there have been scams between some lawyers, some insurance firms and some criminals that have led to higher premiums.”
The average annual motor insurance premium cost £747 in 2014.
Whiplash payouts cost £2billion a year and add £90 to the average policy. The Ministry of Justice wants to introduce the new anti-fraud measures “as soon as possible”.
AA spokesman Ian Crowder said: “Britain has become the whiplash capital of Europe, so the insurance industry welcomes this.”
Earlier this month, Cardiff crown court heard that a crash-for-cash fraud case had involved 28 separate claims and 57 vehicles, and had cost insurance firms £763,068.
Motor insurance
Justice Minister Lord Faulks said: “Insurers back these much-needed reforms and have committed to handing over savings to motorists quickly.”
But George Osborne has already added to drivers’ insurance costs.
He raised insurance premium tax from 6% to 9.5% in July’s emergency Budget.
Crackdown on fake whiplash claims to save drivers £50 a year as insurance firms vow to cut premiums
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