The reforms by the Ministry of Justice (MoJ) aim to tackle the rise of the compensation culture and reduce the amount being paid out unnecessarily by insurance companies – which can lead to higher premiums for honest customers.
The price of average motor insurance fell by more than £100 over the last year, according to the AA.
Despite this, 59,9000 dishonest claims – a rise of 34% – cost insurers £811 million in 2013, the Association of British Insurers (ABI) said.
Otto Thoresen, director general of the ABI, said: “These changes are a very positive development for the vast majority of honest insurance customers who end up paying for the fraud of the minority.
“We applaud the decision to ban the distasteful advertising which offers cash or other inducements for personal injury claims. This only serves to reinforce to unscrupulous claimants that there is a compensation culture to exploit.”
The Government’s measures will tackle bogus motor claims and also others such as “trips and slips” at work and in public places, the MoJ said.