Whiplash claims drive up car insurance premiums

3 May 2018
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Whiplash claims continue to push up car insurance premiums, according to new data from the Association of British Insurers (ABI).

Car insurance premiums fell in the first three months of 2018 but are still higher than they were a year ago. 

The ABI says whiplash claims have forced prices up in recent years. 

Seasonal trends helped ease premiums in the first quarter of the year. Insurance prices typically fall in the first three months of the year as new car registrations in March mean there is more demand, with increased competition leading to reduced insurance premiums.

The average price paid for a comprehensive motor insurance policy in the first three months of the year was £478 – down £13 from the end of the 2017. 

It’s the first time that premiums have fallen on a quarterly basis for two years.

But prices are still higher than a year ago, with drivers paying an average of £464 for a policy in the first quarter of 2017.

An increase in insurance premium tax to 12% to has also caused prices to rise, adding around £8 to the typical motor policy. 

Rob Cummings, assistant director at the Association of British Insurers, says: “The small fall in the past few months gives some relief to motorists but the underlying cost pressures from things like personal injury claims remain.”

It is hoped that government proposals to introduce tougher rules to cap the amount that can be claimed on whiplash claims will stop victims being able to reclaim legal costs and help reverse the upward trend of insurance prices. 

The Civil Liability Bill, which is currently going through the House of Lords, would make it illegal to make a whiplash claim without medical evidence and restrict claims to a maximum of £425.It is estimated that for every £1 paid in compensation to whiplash claimants, an additional 47p goes to their lawyers.

Freddy Macnamara, chief executive of pay-as-you-go car insurer Cuvva, says: “The cost of running a car is huge but there are simple things that can help save money such as shopping around for insurance every year.” 

 

Comments

In reply to by anonymous_stub (not verified)

I gather from this that the fitting of head rests is a waste of time. I understood , when legislation enforced their fitting, , it would prevent whiplash injuries.

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