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New Database to End Inaccuracies in Licence Penalty Point Reporting

The insurance industry is to change the system whereby drivers are responsible for reporting their penalty points on any insurance policy application. The move will be made possible by a new ‘MyLicence’ online database and will bring to an end the self-reporting of motoring convictions, which has led to inaccurate reporting of penalty points by many drivers.

The insurance industry is to change the system whereby drivers are responsible for reporting their penalty points on any insurance policy application. The move will be made possible by a new ‘MyLicence’ online database and will bring to an end the self-reporting of motoring convictions, which has led to inaccurate reporting of penalty points by many drivers. According to insurers, the move will see an average of £15 being slashed from policies. 
 
The Driver and Vehicle Licensing Agency (DVLA) is to put the driving records of all UK motorists online during this summer on the MyLicence database, which will be used by the insurance industry to check drivers’ motoring history of convictions and penalty points. This is intended to provide the industry with accuracy in the data, which will allows them to better assess risk and cut premium prices. Some observers, however, are concerned about privacy and security of the data and are sceptical as to the reported savings on insurance policy costs. 
 
The current set-up allows insurers to check the records of individual drivers via the DVLA’s records, but the process is slow and expensive. To avoid this, insurers simply ask their drivers to make a declaration on their licence history, accepting that some drivers will make an honest error or actually deliberately lie to misrepresent the number of penalty points they have. According to data from the Association of British Insurers (ABI), 23% of such declarations are incorrect. Some 16% of drivers under-declare their convictions, while a surprising 7% overestimate their convictions. Some of this latter group apparently inform insurers about spent motoring convictions, which do not have to be reported. This results in them paying inflated premiums for their policies. 
 
The ABI estimates that the average policy saving could be £15, due to the efficiency of having the information accurately available online. The organisation’s spokesman, Malcolm Tarling, said that it would make the whole process easier and simpler for motorists. All insurers and price-comparison sites have been urged to sign up to the MyLicence service, which will give them access to driver data such as type of licence held, how long a licence has been held and details of any driving convictions. The recruitment phase has been a success, and seven of the largest 10 car insurers have already registered for the service, which is scheduled for a 14 July launch.
 
Not everyone, however, is convinced that the new system will immediately result in policy savings. Comparison site comparethemarket.com spokesperson Julie Daniels said that she believed there would be few changes to premium costs initially. Other industry bodies also expressed concern about data security. The MyLicence database cannot be accessed by individual motorists, but they will be able to use a different online database to check that their details are correctly represented. This system is called View Driver Record and is currently being trialled by the DVLA. The website will be backed up by a phone service, so people without internet access can speak to an operator to check that any details held about them are correct. The new driving licence databases are part of the government’s digital agenda, which is focused on the gradual migration of government services to online platforms. This project will also see the phasing out of the paper part of the current driving licence — it will be replaced by a new photo card licence. Another facet of the migration is the scrapping of the familiar paper tax disc. This information will be moved online from October 2014, with no need to display a paper disc. 
 
The forecast £15 fall in insurance premiums may not be visible to motorists as insurance premiums generally are expected to rise by around 6% this year. A crackdown on personal injury claims over the last two years has resulted in premiums falling by 24%, but this is now set to even out and see average policy premiums start to increase.

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