Insurance premiums could fall as records go online

Drivers may pay less on their car insurance premiums as driving records are set to go online.

The cost of car insurance could fall as the government moves driving records online.

Ministers say that some motorists could see their insurance premiums cut by up to £15 per year as a searchable database, called the My License project, will allow firms to check any driver's license or offence details.

At present, insurers are unable to check license details when offering quotes, so they have to "price in" risk factors in case the driver is lying.

The database that will enable them to check records is set to be launched by the Driver and Vehicle Licensing Agency (DVLA) in March and is part of the Coalition government's digital agenda to move services to the internet.

DVLA and the Department of Transport will be working in conjunction with the Association of British Insurers (ABI) and the Motor Insurers' Bureau (MIB) to develop the My License project and will begin industry testing in February.

As well as better risk-pricing, ABI says drivers will no longer need to send in paper copies of their licenses. According to the DVLA, 23 per cent of drivers do not disclose their driving records accurately to insurance companies, therefore the database will improve the identification of fraudulent non-disclosure.

Claims will also be settled faster as insurance providers will be able to check at the point the application is made, rather than having to ask the policyholder.

Managing director of general insurance at LV= John O'Roarke said: "My Licence offers clear benefits to the industry and honest customers alike. Insurers will be better equipped to identify fraud, accurately price risk, speed up applications and improve administrative efficiency.

"Using My Licence will enable insurers, brokers and comparison websites to achieve real savings that can be passed on to customers and to improve customer service."

By 2015, the paper counterpart of the driving license is set to be phased out and assisted services will be provided for those that struggle to use the internet.

 
  • On: 15 January 2014
  • By: CarShop

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