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Car insurance premiums should be coming down at renewal

One of the reasons for higher car insurance premiums in recent years has been the extra cost of claims for whiplash injuries in car accidents. However, reforms which have recently come into force are likely to mean that all of us should benefit from lower insurance premiums.

A bit of background:-

A whiplash injury is described as “an injury of soft tissue in the neck, back or shoulder that is… a sprain, strain, tear, rupture or lesser damage of a muscle, tendon or ligament in the neck, back or shoulder, or an injury of soft tissue associated with a muscle, tendon or ligament in the neck, back or shoulder.” The definition does not include “an injury of soft tissue which is a part of or connected to another injury and the other injury is not an injury of soft tissue in the neck back or shoulder“.

In 2019/20 there were more than 550,000 claims and, with no upper limits to what could be claimed and no pressure to provide medical evidence, the situation was open to a growing number of fraudulent and excessive claims.

Reforms which came into force on May 31st include a simple online portal for road traffic accident claims under £5000, meaning that lawyers are not required. Overall, it reduces the cost to insurance companies and still provides reasonable compensation for sufferers. In addition, medical evidence will be mandatory, which will also remove much of the incentive to make fraudulent claims.

The new portal is described as being very easy to use, having been extensively tested and with simple user guides to help even internet beginners to complete the necessary questions correctly. A telephone helpline is also available.

Apart from a number of ‘no win/no fee’ legal firms having to look for another new business stream, it will also put organised gangs who arrange fake accidents to make malicious claims for many thousands of pounds, out of business. By insisting on medical evidence, it will make it much more difficult for these gangs to engineer ‘accidents’ and get a payout.

It is estimated that savings to insurers will be in the region of £1.2 billion and the good news is that insurers have pledged to pass on the savings to car owners. The savings individually could be as much as £35 per annual policy.

Regardless of this saving, when your current insurer offers you a new premium at renewal time, it would help if you compared the offer with other insurers to make sure you get the best priced policy that covers your needs before accepting.

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