Money alert: Cutting the cost of motor cover

Minor whiplash injuries should be treated with rehabilitation rather than cash compensation. Doing so would help cut the cost of car insurance by £50 a policy, according to Aviva.

The insurer also calls for other reforms such as the banning of referral fees and the small claims track limit to be raised to £5,000.

The moves are aimed at cutting the amount of cash fraudsters and claims management companies take out of the insurance industry.

Aviva predicts UK motorists could benefit from a £1.4bn cut in motor insurance costs if the proposals were adopted. Maurice Tulloch, Aviva chairman, said: "If the UK is serious about reducing the cost of motor insurance for the long term, then it is clear we have to address the way we compensate minor whiplash, using rehabilitation only to treat genuine, minor injuries.

"We believe that the current system offers financial incentives for personal injury lawyers, claims management companies and fraudsters, which inflates the cost of motor insurance."

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

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