New plans to drive down the cost of car insurance – see what we did there? – have come into force which will also tackle the number of suspected fraudulent small injury claims.

The Civil Liability Act aims to tackle the growing number of small personal injury claims which will also have an impact on insurance premiums.

Good news, right? Let’s buckle up and have a look at what this actually means in reality. 

The first thing to know is that the new rules came into force on May 31. 

The government says the new rules will bring about long-awaited reforms to personal injury compensation that will mean a fairer system for claimants and insurance customers.

Whiplash style claims in the UK are easily the most common types of small injury claims. The number of claims in the UK have shot up by 40 per cent since the mid-2000s but oddly, the number of road accidents have fallen by 30% over the same period. That’s a significant bump in the road which can only mean that many are exaggerated or fraudulent – according to the government.

The government says the changes will clamp down – we hope you’re keeping count – on the perceived ‘compensation culture’ by taking action on cold calling, regulating claims management companies and tackling holiday sickness claims.

The good news for insurance companies is that it could save them an estimated £35-£40 per policy. The industry plans to drive (we’ll never tyre of these) this back into savings for the customers.

The reforms mean the small claims court limit for road traffic accidents increases from £1,000 to £5,000. 

A new fixed compensation tariff for ‘pain and suffering for whiplash’ claims will be available for claimants with an injury recovery period of up to two years. 

The new compensation tariff and small claims track limit will only be applicable to occupants of a vehicle in a Road Traffic Accident and excludes motorcyclists and pedestrians.

There is also a ban on settling or seeking to settle whiplash claims without medical evidence of the injury. This will prevent defendant insurers paying off low value claims rather than incur the expense of investigating them properly.

Finally, under the new rules, most claims of less than £5,000 will mean the claimant has to fund the solicitor dealing with the claims themselves.

If you want to talk more about this or need advice on gearing up (we’ll stop now) for the new rules, you can always talk to one of our award-winning advisers. We’d be happy to help.