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DVLA Penalty Points Database Could Bring Down Motor Insurance Costs

By raccars Published

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The DVLA is to offer insurance companies a new database containing details of drivers' penalty points tally rather than relying upon motorists to own up. 'MyLicence' will be available online for insurers this summer.

The insurance industry claims that premiums will be lower as a result of the new system, which allows them to verify details of penalty points and motoring convictions given by motorists applying for insurance policies. Motoring organisations however are concerned that there will be issues with the security of drivers' personal data.

Insurance companies can already verify drivers' records by checking them individually with the DVLA, but the process is lengthy and expensive. Instead insurers tend to rely on drivers to provide them with accurate information regarding the number of points on their licences and driving convictions. Unfortunately, a study by the Association of British Insurers concluded that this information was incorrect in nearly a quarter of cases, often as the result of a genuine mistake.

About one in six drivers apparently 'under declare' their convictions and about one in 14 overstate the case. The latter can find themselves mistakenly declaring spent convictions, which has the effect of artificially inflating their insurance premiums. The ABI believes the average cost of insurance premiums could go down by about £15 if insurance providers can use the DVLA database to obtain an accurate picture of clients' driving records.

The database is to be made available to all insurance companies, brokers and even price comparison websites that wish to sign up to the scheme. A search can be made with a driving licence number and will return information about the kind of licence held by the motorist, how long they have had it and what, if any, driving offence they have committed. 70% of the UK's largest insurance providers have already signed up for the service, which is due to launch on 14th July.

Insurance providers however believe the system will not reduce premiums unless it becomes standard practice across the board. To protect driver information, MyLicence will only be available to insurers and drivers will be able to verify that information held about them is accurate via a separate system called View Driver Record. The DVLA plans to have this online in August and drivers can access it by telephone if they do not have internet access.

The new scheme is part of a wider move by the government to use digital services in place of paper systems, meaning the traditional tax disc and paper driving licence are to be phased out in favour of more modern alternatives.

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