Crash-for-cash fraudsters are fuelling a compensation culture which is pushing car insurance premiums to record levels and costing motorists £5m a day, as promised government reform stall.

The warning comes from insurance giant Aviva which says that 36,000 crashes have been staged in the past two years by fraudsters chasing a payout, and has called for reforms to the law surrounding whiplash claims.

Two years ago then-chancellor George Osborne proposed to cut compensation for minor, short-term injuries and remove the right for lawyers to recover their costs in low-value claims.

Since then, there have been around 1.5 million payouts for minor injuries, totalling an estimated £2.7bn in compensation, with nearly £1bn in lawyers' fees – a cost which would disappear under the proposed reforms. The total cost equates to £5m a day that the whiplash reforms are delayed, says Aviva.

The company, which employs 5,000 people in Norwich, says it has declined one in seven third party whiplash claims for proven or suspect fraud in the past year amid a 'have-a-go culture' where minor accidents are exploited to secure payouts for minor injuries.

It also fought around 1,200 cases where it believed its customers had been wrongly accused of causing injury in an accident, winning 73% of them and securing more than 250 findings of fundamental dishonesty, which means the claimant can be ordered to pay the defendant's costs.

The commitment to personal injury reform was included in the government's manifesto and the Queen's Speech earlier this summer.

Rob Townend, claims director for Aviva UK General Insurance, said: 'Thanks to strong action by the courts and greater awareness of fraud thanks to media attention, we are beginning to see a slight reduction in the number of spurious injury claims. But as Aviva's research shows, the cost of the UK's compensation remains at an unacceptable level, fuelled by fraudsters, opportunists, lawyers and claims management companies and paid for by honest motorists.'

He said the reforms were needed to offset the doubling of insurance premium tax and a cut in February to the discount rate which have pushed the cost of motor insurance to record levels. The insurer has said it will pass on 100% of the savings to customers.

Mr Townend added: 'Now is the time for government to bring forward legislation to relieve pressure on motor premiums. We understand that the government has had an unprecedented agenda since the end of 2015.

'But we don't think it's fair that our customers have to continue to pay for a broken system which financially incentivises opportunists and fraudsters.'