Driver Licence Database Could Reduce Insurance Premiums
My Licence Database
The My Licence Database could reduce the cost of motor insurance. But why? The purpose of this resource – that should be complete in 2015 – will be to enable insurers to confirm the claims motorists make about their licences before pricing the policies. This will reveal any endorsements or disqualifications which is important as twenty-three percent of drivers make inaccurate statements (according to the Association of British Insurers). Some of these statements are errors whereas others are ploys to reduce premiums. As things stand, insurers that want to double check licence claims must contact the DVLA by phone. This is to costly and time consuming to perform in every case - so they recognise that some people will misrepresent themselves and price in risk across the board. Every licence holder is therefore penalised. The Association of British Insurers estimates that the database will reduce the price of insurance for honest motorists by £15. I suspect that drivers will believe that if they see it. Furthermore, the paper counterpart that accompanies the photocard licence will soon be obsolete, so it will be phased out by 2015. The older-style paper only licence will be abolished soon afterwards.
Making False Statements To Insurers
The My Licence Database will minimise the number of false statements relating to licences - but there is a wider issue. Some motorists – often young, carefree, motorists - believe that making false statements to their insurers is a risk free pass time. Nothing could be further from the truth. Why? Because insurance companies that have been misled might be within their rights to cancel policies and deny claims. As collisions can cause hundreds of thousands of pounds worth of damage, the long term consequences could be devastating. Furthermore, motorists that have had their insurance cancelled might struggle to find new providers. Typical false statements include claiming to live in a low crime area – perhaps with parents - in a bid to reduce the premium. Claiming to drive (say) eight thousand miles per year while covering twenty-thousand is another common scam. Equally, a motorist might fail to tell the insurer that the vehicle has been modified with expensive alloy wheels, exterior stickers and carbon fibre components, etc. In the event of a theft, the insurer might therefore claim that the policy is invalid as the premium was based on a standard specification car that would have been less of a target.