The Government has announced new reforms to counter whiplash fraud and reduce costs for motorists.
New AA statistics show average motor insurance premiums have fallen by more than 12% over the past year, partly thanks to recent Ministry of Justice reforms to no-win, no-fee deals, a ban on referral fees and action on rogue claims firms.
The reforms announced today focus on whiplash cheats, whose bogus compensation claims have helped to force up average motor insurance premiums, and will be targeted by new independent medical panels which will ensure only evidence from accredited professionals can be considered.
A spokesman said: “This will mean people can no longer profit from exaggerated or fraudulent compensation claims but victims with genuine cases can still get the help they deserve.”
These will be introduced from next year.
Justice Secretary Chris Grayling said: "We are turning the tide on the compensation culture and helping hardworking people by tackling high insurance premiums and other motoring costs.
"It's not right that people who cheat the insurance system get away with it while forcing up the price for everyone else - so we are now going after whiplash fraudsters and will keep on driving premiums down."
Other measures include freezing the statutory MoT test maximum cost at £54.85 until at least 2015, and a new comparison sign system for motorway refuelling.
Comparison road signs will be trialled which will show prices at different service stations along a route, making it easier for drivers to get the cheapest deal and encouraging competition on prices.
IAM director of policy and research Neil Greig said: "At last the government has recognised that high prices at motorway service areas are putting people off stopping. Comparison pricing is just a start and the IAM will be watching carefully to see of true competition does actually drive down prices."
Roads Minister Robert Goodwill said: "The costs of owning and running a car are felt by millions of households and businesses across the nation. The Government is determined to help keep those costs down. That is why we are freezing the price for an MOT test and looking again at the costs associated with getting a driving licence.”
New figures from the MoJ's Claims Management Regulation unit also show that the number of claims firms in the market has plummeted by more than 1,000 following the law changes last year, from a peak of 2,553 in December 2011 to 1,485 last month.
Simon Douglas, director of AA Insurance, said: "“While there have been some reductions in the size of claims there is little evidence yet of a fall in the number of personal injury claims, particularly whiplash injury so I welcome the reforms announced today."
The number of whiplash claims has fallen since 2011 but there were still almost half a million claims in 2012. Insurers say these claims cost them more than £2bn in payouts and lead to an average premium increase of £90 for drivers. Each whiplash compensation payout costs an average of £2,400 insurers say, with an additional £2,000 in legal costs.
The Government is to work with experts to implement the independent medical panels, developing a scheme for accrediting medical experts who can assess whiplash injuries, enhancing the medical reporting process, and improving information for medical assessments.
The Motor Accident Solicitors Society (MASS) welcomed the announcement.
Craig Budsworth, Chair of MASS, said: “Our members will today be breathing a huge sigh of relief. The Government has pulled back from the brink of denying thousands of legitimate claimants access to legal advice. If the insurance industry con had succeeded, they would have been able to hoodwink countless individuals in the small claims court.
"All sides must now work together to address the serious problem of fraud and exaggeration in claims finding workable solutions that are proportionate, balanced between the interests of claimants and defendants and favourable to all those who pay motor insurance.”