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The Government has launched a consultation on proposals to reduce the number of whiplash claims, which would allow insurance companies cut the price of premiums.
According to the Ministry of Justice, there are 50% more whiplash claims than a decade ago, despite there being fewer accidents on the roads. It claimed this is down to a "predatory claims industry" that encourages minor and fraudulent requisitions.
The Government wants to scrap the right to compensation or put a cap of £425 on the amount people can claim.
At present, the average payout for claims is £1,850.
Under the new plans, compensation would only be paid out following a medical report that proves there was an injury.
The Government also wants to ban offers to settle disputes without medical evidence.
Should these plans come into force, insurers have pledged to pass on the savings to motorists, which could be worth up to £1bn, according to Government estimates.
The consultation runs until 6 January and can be found here.
"For too long some have exploited a rampant compensation culture and seen whiplash claims an easy payday, driving up costs for millions of law-abiding motorists," said justice secretary Elizabeth Truss.
"These reforms will crack down on minor, exaggerated and fraudulent claims. Insurers have promised to put the cash saved back in the pockets of the country's drivers."
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