Drivers across England and Wales will collectively save over £ 1 billion in savings when new whiplash claims rules come into effect.
A new online portal is available for road personal injury claims under £ 5,000 including whiplash.
This means applicants can settle their own accident claim from today (Monday) without the intervention of a lawyer if they so choose, saving legal costs.
It is expected that the majority of traffic accident claims will use the portal in the future.
There is also a ban on settling whiplash cases without medical evidence – a practice that has opened the door to fraudulent or exaggerated claims.
Claims for whiplash and other traffic accident injuries are included in the cost of car insurance that everyone pays.
The Department of Justice (MoJ) said the move could cut a typical car insurance premium by around £ 35 per year.
The changes are intended to reduce the “unacceptably high” number of whiplash claims per year, in 2019/20 alone there were more than 550,000.
Despite fewer accidents reported since 2013 compared to the previous year, road accident damage is more than 40% higher than in 2006, the MoJ said, increasing premium costs for ordinary motorists.
Insurers have pledged to pass on the savings of £ 1.2 billion to drivers through these reforms.
Lord Chancellor Robert Buckland said: “For too long the whiplash claims system has been open to abuse by those looking for an easy payday – with ordinary motorists paying the price.
“Our changes, which come into effect today, will put an end to this greedy opportunism and ultimately result in the savings flowing back into the pockets of the country’s drivers.”
Dominic Clayden, Managing Director of Motor Insurers’ Bureau (MIB), which operates the new online claims portal for Official Injury Claim (OIC), said: “We are delighted that we have fulfilled our mandate to build a service that the requirements of these important requirements are met by policy changes.
“The MIB has always focused on ensuring that the new legal process is as simple and straightforward as possible for anyone who has to make a claim.
“To ensure the service works well for everyone, we will continue our work with the Justice Department to hear feedback and make further improvements.”
Steve Gooding, Director of the RAC Foundation, said, “There are almost as much headlines about whiplash claims as there are claims themselves.
“This new system should mean that legitimate cases are easier and faster to process, fraudulent claims are more likely to fail and all drivers benefit from a reduction in their insurance premiums.”
Dave Lovely of insurance giant Aviva said, “These reforms are critical to creating a fairer system that balances care and compensation for real injuries from car accidents while eliminating the extra costs.
“The new OIC portal, endorsed by the insurance industry, will make it easier for motorists to manage their claims without legal assistance, including getting medical reports and receiving compensation payments.
“For the insurance industry, the new law allows us to focus on people with real injuries and claims to ensure we help them when they need us most. This is a strong example of the insurance industry working for the benefit of its customers and Aviva is sticking to its promise to pass on 100% of the savings we make through the reforms to our customers. “
Aviva added that the broader reforms would effectively end the “no win, no fee” incentive behind many minor engine damage claims that encouraged some claimants to “try it out”.
This will remove the legal costs for many minor, hassle-free claims and should also reduce the number of disruptive calls and texts chasing damages claims, he added.
James Dalton, Director of General Insurance Policy for the Association of British Insurers (ABI) said: “This long-awaited reform is a great win for consumers. The portal and related reforms will help control the costs associated with whiplash claims while ensuring that adequate compensation is paid to truly injured claimants.
“ABI has worked with the government for several years on much-needed reforms to the UK’s personal injury system. This portal is an important development to ensure a compensation system that focuses on real claimants while cracking down on those who want to take advantage of the system. “