Autumn Statement 2015: motorists to see insurance bills fall by up to £50
Motorists could see up to £50 slashed from their insurance bills if the government is successful in bringing forward reforms to the compensation culture around minor motor accident injuries.
The government says it is determined to “crack down on the fraud and claims culture in motor insurance”, with claims for whiplash adding an average of £90 to motor insurance premiums and costing the country £2 billion. The government says these claims are “out of all proportion to any genuine injury suffered”.
It says its new measures will new measures “end the cycle in which responsible motorists pay higher premiums to cover false claims by others” and remove over £1 billion from the cost of providing motor insurance – which insurers should pass on to customers in the form of an average saving of £40 to £50 per motor insurance policy.
However, Osborne was immediately criticised for making the cost-saving announcement at the same time as its previously announced hike in insurance premium tax (IPT) is introduced.
Steve McCabe, Labour MP for Birmingham Selly Oak, said: “The Chancellor claims he is saving money for motorists in accident claims, but he increased motor insurance tax in July budget.”
In his summer Budget, Osborne hit drivers with a double whammy of updated Vehicle Excise Duty (VED) bands for new cars from 2017 and a rise in insurance costs. The government increased the standard rate of Insurance Premium Tax from November 2015, from 6% to 9.5% – or £1.5 billion a year.