Car insurance prices fall as whiplash injury claims are curbed

Premiums drop nearly £60 this year alone

Fake whiplash claims cost motorists collectively more than £1bn a year (Rex)

Car insurance prices have fallen for the first time in three years, partly thanks to plans to crack down on claims for whiplash injuries.

Premiums have dropped by an average of 7 per cent – or £59 – in the first three months of the year, according to research by Confused.com. Prices fell 2 per cent – or £13 - in 12 months after rising in the last quarter last year.

The insurance portal said a government bill to curb the number and cost of whiplash claims was already leaving drivers better off.

Men are now paying an average of £810 for cover, and women £715, the survey showed.

Last month the justice secretary, David Gauke, unveiled plans to set a cap on whiplash claims and force claimants to provide medical evidence.

It is believed that exaggerated and fraudulent claims and compensation culture cost ordinary motorists at least £1bn a year.

Mr Gauke said the government wanted to ensure whiplash claims were no longer “an easy payday”.

“The number of whiplash claims has been too high for too long, and is symptomatic of a wider compensation culture,” he said.

Bogus claims uncovered by the industry include:

• Last year insurer Admiral said a quick-thinking driver helped block a bogus claim by taking photos when one car collided with the rear of another whose driver tried to claim £1,000 for damage and whiplash
• Footballer Gary Burnett, from Wigan, claimed he was so badly injured in an accident at a fast-food drive-through that he could not play and claimed £2,000. But he was ordered to pay £11,000 court costs for fraud and was given a four-month suspended jail term
• In January this year, two drivers who tried to claim £90,000 for a crash they engineered in Cambridgeshire admitted fraud and were ordered to pay £70,000 in legal costs

Ministers last month also proposed changes to the way personal injury payouts are calculated following serious injuries – the so-called Ogden rate. Insurers said although the reform will not take effect until next April, it was also already contributing to plunging premiums.

The website’s survey stated: “Insurers seem to have softened prices as the Government has announced a review of the Ogden Rate discount, expected in April 2019, which could mean insurers pay out less when drivers make a claim.

"The government has also announced a reform to the way whiplash claims are calculated and paid which may have also had an impact.”

It added: “However, the average comprehensive car insurance policy is still an eye-watering £768. And research reveals customers who renew with the same insurer are not benefiting from these savings.”