Insurers urge Government to press ahead with whiplash compensation reforms

Insurers have urged the Government to press ahead with reforms to compensation for minor whiplash injuries - saying delays to the promised crackdown are costing honest motorists nearly £3 million a day collectively.

The Association of British Insurers (ABI) highlighted then chancellor George Osborne's promise in last year's Autumn Statement that the Government would consult on how to implement proposals to crack down on the fraud and claims culture in motor insurance.

It said a consultation paper setting out how to implement the reforms has still not been published nearly six months after it was finalised.

The ABI said motor premiums have already increased by 10% over the last year, with the rising cost of personal injury claims helping drive up the costs, as well as big increases in insurance premium tax (IPT) - which is gone up from 6% to 10% in less than a year.

James Dalton, director of general insurance policy at the ABI, said: "The Ministry of Justice seems to be rowing back from much needed reform to the civil justice system that will save motorists up to £50 a year on average.

"The UK has one of the most abused systems in Europe and the reforms would tackle the excesses of the compensation culture.

"Without action, claims management companies will continue to nuisance call and text honest motorists encouraging them to make fraudulent and exaggerated claims through claimant law firms.

"Every day of delay costs honest motorists across the UK nearly £3 million."

The ABI said previous reforms introduced in 2013 saw £1 billion in reduced costs passed onto customers, but cold callers have found new ways around the rules and the costs of personal injury claims are on the rise again.

It said the Government's proposals would cut out incentives for those "who want to rip off the system".

Among the plans, injured people would still be compensated for their losses, such as the cost of medical treatment and loss of earnings, but "general damages" - cash payments on top of these losses, for pain and suffering - would be limited for minor injuries.

A Ministry of Justice spokesman said: "The number and cost of whiplash claims remains too high, increasing premiums for ordinary motorists.

"We remain committed to tackling this issue, and will set out our plans in due course."