Ministers seek to drive down car insurance rates

With the ‘epidemic’ of whiplash-related claims driving up car insurance rates due to increased insurer costs, Government ministers have recently announced plans to tackle the issue in any way they can to provide cheaper car insurance to drivers in the UK.

Last week, Transport Secretary Justice Greening hosted a summit where she urged car insurance companies to reduce the premiums they charge younger motorists, pointing to a marked improvement to the casualty rate over the past few years.  Ms Greening implored insurers to follow examples set by many industry leaders, such as Co-operative Insurance, who adopted ‘smart box’ telematics systems into vehicle sin order to monitor the driving habits of young drivers in order to allow them to earn lowered insurance rates.

Justice Secretary Kenneth Clarke also announced quite a few measures designed to act as a deterrent to fraudulent whiplash-related insurance claims as well during the summit, as whiplash claims have increased by 70 per cent over the past half decade, even in the face of the number of accidents undergoing a decline.  Mr Clarke announced that a consultation will be launched on setting up an independent medical panel to determine the veracity of suspect whiplash-related claims, adding that he wall also consult on increasing the small personal claims threshold to £5,000 to act as an encouragement for claimants to go utilise this fast-track process in lieu of taking an insurer through the more expensive claims process.

Whiplash claims cost the insurance industry £2 billion in 2011 alone, insurance experts say.

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