Motorists can expect their car insurance to be slightly cheaper thanks to driving records going online.
Insurers will be able to check a digital database for drivers’ licence details, such as speeding offences, meaning they will no longer have to ‘price in’ risk factors. The paper counterpart of a driving licence will no longer be necessary.
The Association of British Insurers estimates that premiums will fall by £15 for “honest” drivers, which will create “significant cost savings”. Claims will also be settled more quickly as they will now be sorted at the application stage as opposed to by asking the policyholder.
Francis Maude, cabinet office minister, said: “This [change] will enable insurers, for example, to price much more accurately, because they will not have to take anything on trust.”
Research from the DVLA shows that nearly one in four (23 per cent) of drivers fail to accurately disclose their driving record – including disqualifications – when they apply for insurance.
Keith Morris, chief executive of Sabre Insurance, said the onus was on policy providers to sign up quickly for the new system, which should be rolled out by 2015.