Why do we check your driving licence?
This is probably one of the most common FAQs that we are asked by our customers. Why is it that we sometimes require copies of your documentation when we issue a new policy?
The answer is that it makes your policy significantly cheaper. Here’s why.
It may seem as though it is just a requirement of some nitpicking administrator, and it is certainly a minor inconvenience, to have to send copies of driving licences and, occasionally, other paperwork to us. After all, you’ve already given us all the information printed on your licence.
But, of course, you told us the truth. You have no reason to lie to us, because you have a driving licence, and even if you have a few penalty points, you told us about them, because you know we have very competitive prices for drivers with motoring convictions, and you’re an honest sort of person.
Unfortunately, a lot of people aren’t, and recent research by the the Association of British Insurers and the DVLA has found that 17% of currently insured drivers in the UK have supplied incorrect details to their current insurer. That is one in six. The research involved an anonymised sample of many thousands of records comparing the details held by insurers with those held by the DVLA. And it found that a good number of the policyholders were liars.
What are they lying about?
Some are giving incorrect address details to the insurance companies to get cheaper insurance. By claiming they live at an address in a low risk postcode, such as gran’s retirement property in the Devon countryside, when in fact the car spends most of its time in Peckham, they pay less money. This doesn’t just cheat the insurance companies – it cheats their customers too, because everybody else’s price goes up to cover the increased expenditure on claims.
Others are lying about the points or convictions on their licence. You may think it’s sort-of-understandable to omit details of the SP30 you picked up from a speed camera. It doesn’t make you a higher risk than you were before, does it? As it happens we agree, although others may not, and if you have picked up several in a relatively low mileage, that may have more of a bearing.
But these are not the kind of convictions that would cause us particular concern. If you are hiding some other convictions – drink driving convictions, dangerous driving and so on – well perhaps it’s understandable you might be ashamed, but it isn’t the end of the world, and we can sort you out a fair rate if you tell us. But I think most people with a clean driving history, or even a few minor convictions would agree that someone with a really serious conviction, or a huge string of convictions represents a higher risk, as indeed the claims statistics show.
Even this, though, isn’t the worst thing people are trying to hide. Because, shockingly, many will lie about their licence. They may claim they have a full UK licence, when in fact their entitlement is provisional. They may claim their licence is valid when it has been revoked by the courts. They may be driving in defiance of a medical restriction. Amazingly 1% of customers in the ABI’s sample did not have a licence at all.
Unsurprisingly the folk who are withholding this kind of information have significantly more accidents than those who don’t. You may think that these folk would be caught out when it comes to a claim, and you would be quite right – many are. But even if they are caught out, and their claim is invalid, the insurer is still liable for any third party losses under the Road Traffic Act. And since third party personal injury tends to make up the lions share of claim costs, this doesn’t mean as much as it might.
A Hidden Problem
While the insurers have been picking up the tab for these claims (and passing costs on to legitimate customers), the press has not had much reason to make a fuss about these as they have with the uninsured drivers, who make up, on average, 5% of all cars on the road – nearer 10% if you live in a big city. And according to the Motor Insurers Bureau, 6% of drivers are fronting, putting a child as a named driver on a parent’s policy when, in fact, they do the majority of the driving. And when you add these to the uninsured and the insurance liars, you find that an astonishing 26% of drivers on the road have something to hide, that is one in four, giving you all the more reason to take extra care.*
All of which vindicates our stance. We ask for copies of your documents, because it saves you money. Our policies are more competitive because you share your driving documents with us. Those who have something to hide won’t send them in, and they will have to go elsewhere to get insurance. If you’ve forgotten to tell us something, this isn’t usually a problem, but This means our policyholders make fewer claims. When they do claim there are fewer issues with invalid policies and non-disclosure, which means lower costs for the insurers. And all of this means cheaper rates for our customers.
If you take a look at the graph, I think you’ll agree that the inconvenience of filling in some forms or photocopying your licence is a small price to pay for a big saving. And if you do have a chequered history, remember that the price of honesty may be a lot less than you might think.
*This may be invalid as the fronters may also be lying about other things, but assuming that the insurers checked the main driver with the DVLA, I think there is sufficient justification for treating the data this way in an informal blog post and bearing in mind the reported data is approximate anyway.