Insurers to prepare for whiplash reforms

The Chartered Insurance Institute has urged both underwriters and claims professionals to prepare for whiplash reforms, due to be introduced in April 2020.

According to the Ministry of Justice, the reforms will reduce insurance costs for ordinary motorists by tackling the continuing high number and cost of whiplash claims.

Interim chairman of the Society of Underwriting Professionals, David Williams said underwriters need to make sure they are on top of the changes plus work to report the savings these deliver for consumers.

“With motor (insurance) pricing being a complex area, separating out the impact of just the legal changes might prove much more difficult than I think the government is expecting,” he added.

The reforms will reduce the financial compensation for injury by setting a fixed amount payable for injuries lasting less than two years and reduce the amount an insurer must pay in costs by increasing the small claims track limit from £1,000 to £5,000 for road traffic accident-related claims.

For employers' liability and public liability, the limit is lifted to £2,000.

Chairman of the Society of Claims Professionals and head of claims at Aspen Risk Management, Sue McCall commented: “The headline result of this increase is that those claims valued below the new limits will no longer result in costs recovery.

“The expectation is that there will be a far greater number of litigants in person,” she added. “This will bring with it the need for more time spent per case in explanation and communication.”

McCall also said the profession should note that a portal for whiplash claims is being developed and expected to be in place by April 2020.

“We may see a surge in reported motor claims ahead of the reforms, as we did prior to the introduction of the Legal Aid, Sentencing and Punishment of Offenders Act 2012,” she continued.

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