MPs have told insurers to help cut the cost of fraudulent whiplash claims, which are contributing to rising insurance premiums.
MPs have also called on insurers to reduce the cost of premiums by abandoning the practice of passing on accident details to personal injury claim firms.
Industry experts estimate that claims for whiplash alone add 90 to the average insurance policy, while other types of fraud inflate it by a further 40.
James Dalton, of the Association of British Insurers, said that over the previous three years, whiplash claims had increased by a third to 570,000 a year which equates to one new claim a minute.
Louise Ellman, Transport Committee chair, said: 'The financial threshold for receiving compensation in whiplash cases should be raised and, if the number of such claims does not fall significantly, the Government should bring forward legislation to require objective evidence both of a whiplash injury and of it having a significant effect on the claimant's life before compensation is paid.'
Ellman also said that the insurance industry must abandon sharp practices that push up premiums. These include passing personal details of those involved in a crash to third parties, as well as taking referral fees from solicitors and garages.
The committee also demanded that the 2008 Data Protection Act be fully adhered to and respected, and that those who breach it should be punished. It also recommended that an investigation should be launched into the cold-calling of car-crash victims.
Nick Darling, the director of general insurance at the Association of British Insurers, welcomed the committees findings, and said: 'It is critical that Britains whiplash epidemic is tackled once and for all and the Select Committee's acknowledgment that the bar to receiving compensation for whiplash is too low, is a step in the right direction.'