Plans to cut down on compensation paid out for whiplash claims could result in motorists' insurance premiums dropping.
A consultation on insurance claims followed a promise made last year by government ministers, and could see the right to compensation scrapped, or at least capped.
Such claims have risen by 50 per cent over the past decade, costing insurance companies in the region of £1billion a year.
However, many of them are thought to be bogus 'crash for cash' scams as while the number of road accidents in the UK has dropped by 40 per cent since 2000, the number of injury claims has risen by 90 per cent over the same period.
Andrew Morris, operations director at Aviva, said on BBC Radio 4's Today Show: "All of that suggests that actually there is something fundamentally wrong with our compensation system. That means cash is too easily available and that in the UK almost 80 per cent of every injury claim that we see relates to whiplash. Now in France, by comparison, is it just three per cent."
In its consultation, the Ministry of Justice said the payments, which are independent of any medical bills or loss of earnings, could be banned, or reduced.
"These reforms will crack down on minor, exaggerated and fraudulent claims."
Currently, the average payment for a whiplash claim is in the region of £1,850. If this is capped, it will be reduced to a maximum of £425.
If this ban or cap is introduced, insurers will see massive savings, which they have pledged to pass on to the consumer. For each motorist, this will mean a premium £40 cheaper on average than previously.
A number of other measures were also proposed during the consultation.
These included introducing a tariff system for compensation, payable for more significant injuries than whiplash; allowing small claims courts to handle all personal injury claims up to £5,000 (the current small claims court limit is £1,000) therefore reducing legal costs, and requiring medical reports from an accredited expert before any claims could be paid.
The Association of British Insurers welcomed the consultation, with a spokesperson commenting: "These reforms are important. They will help to give honest motorists a better deal."