The government has brought forward new legislation which directly affects road traffic accident claims. This new whiplash reform restricts the amount of payable damages for whiplash claims. The tariff caps are dependant on the duration of the injury, but the changes are seen as a big win for consumers.
On May 31st, Draft Statutory Instruments will commence new tariff levels, restricting the total amount of damages paid on certain soft tissue injuries. Any damages for whiplash injuries will be limited to £240.
The limit on the amount of payable damages can increase if the duration of the injury is beyond 3 months. A fixed amount is added to the tariff to cover minor psychological injuries.
What is whiplash?
Whiplash is defined as an injury of the soft tissue in the neck, back or shoulder. A sprain, strain, tear, rupture or lesser damage of a muscle, tendon or ligament. They are common in car accidents and traffic accidents due to the speed involved. There are 2.7 claims for whiplash made per accident, costing the insurance industry £2 billion a year. The UK is said to have a whiplash problem, and this new legislation is intended to help solve it.
The average pay out for whiplash claims in the UK is £1,850. The new amendments will place a hard cap on claims for injuries that are only sustained over a short duration. They aim to ensure whiplash claims no longer become an easy payday.
Why are the new whiplash reforms good for consumers?
This is good news because car insurance premiums are expected to fall by £35 a year. These changes to the way whiplash claims are calculated and paid will try to save insurance companies time and money. Saving insurance companies money generally means cheaper premiums and a softer market.
The new whiplash reform should see a knock to the UK’s compensation culture which, Aviva’s Rob Townend says, has been costing honest motorists £5 million a day for some time.
Average premiums rose by £70 over the past 6 months, and this bill could help bring costs down for consumers.
