British drivers could soon find that their insurance premiums are reduced by as much as £15 each, after the launch of a new database which will see all drivers in the UK have their details put online and accessible by insurers. This is designed to stop people lying about points they have on their license and allowing insurers to price them fairly, cutting back on losses through claims from drivers that might otherwise have been risk assessed more accurately.
The online licence checking service will be accessible by insurers, allowing them to look up ever more details on their customers, including accurate, up-to-date records on how many points are on their license, what they received them for and when they are set to expire. This system will completely replace the current practice of manually contacting the DVLA to check up on a driver’s records, which was not only slow, but would cost the insurer each time they did it.
Because of that charge and the time involved, insurers have in the past, asked drivers to declare their points and only cross reference it in the event of a claim. However, to make sure that they don’t get caught out by too many people lying, insurers assumed a certain percentage of those asked wouldn’t be truthful and were therefore a higher risk. Since they couldn’t be weeded out, insurers simply calculated the odds and raised everyone’s premiums to compensate. With this new system, the saving could be passed on to consumers.
That will certainly be the case for some seven per cent of insurers, who according to The Telegraph, “over-declare,” whereby they tell an insurer about an old claim or conviction, in which case their insurance premium is increased unfairly.
As the Association of British Insurers points out as well, the entire process of applying for insurance premiums will be sped up too, since checks will now be automatic, thereby removing certain check boxes and drop downs from being manually filled in.
However, not everyone is convinced that this new database is a good idea. Julie Daniels, from CompareTheMarket believes that the savings won’t come in to play until every insurer adopts the new system, which is unlikely to happen straight away. She also highlighted that there was a chance the DVLA may not have everything correct, which could cause further issues.
To make sure that the database isn’t full of errors, the DVLA has announced that a consumer accessible version will be made available in the coming months.Those who are unable to get online to view their details, will also be able to get in touch with the DVLA over the phone and adjust the information as necessary.
This move to digitise more information about drivers isn’t just to help out insurers though, but to reduce the amount of paperwork the government uses. Along with the DVLA putting this information online, the government has also announced that it’s phasing out paper license counterparts by 2015, sticking to just the single card license moving forward.
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