Business

Quicker payouts for crash victims

Car accident
Image caption Some accidents lead to claims for personal injury compensation

People injured in road accidents should have a shorter wait for compensation under a new process.

The changes, which came into force on Friday, will cut the average time taken to settle a personal injury claim.

This would fall from two years to no more than nine months, the Association of British Insurers (ABI) said.

The changes apply to motor personal injury claims valued at between £1,000 and £10,000, some 80% of all claims, the ABI said.

Under the new process:

  • An insurer must decide on liability within 15 days of being notified of a claim
  • Standardised electonic claim forms will be used
  • Legal costs will be fixed.

The ABI estimated that 500,000 people a year would benefit from the quicker process.

"These changes will not only mean quicker compensation for many, but will also reduce the level of legal costs that all motorists ultimately end up paying for through their motor premiums," said Nick Starling of the ABI.

In January, the AA said compensation culture was partly to blame for a record rise in car insurance premiums in the previous 12 months.

Personal injury claims were becoming "increasingly embedded in British culture" often as a result of lawyers' adverts, it claimed.

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