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Database changes 'could cut car insurance rates by 20%'

30-11-2006

Premiums could be slashed by a fifth if car insurance groups allowed certain non-brokers to take part in a motoring database designed to cut fraud, it has been claimed.

Premiums could be slashed by a fifth if car insurance groups allowed certain non-brokers to take part in a motoring database designed to cut fraud, it has been claimed.

Since 2001, the Motor Insurance Database has accumulated details on motorists throughout the UK, with the intention of helping fight back against drivers who take to the roads without car insurance cover.

When a car insurance company discovers new information about a driver, such as that they have driven without protection, they can upload it onto the database for other brokers to view.

However, the current format prohibits firms that are not car insurance companies from uploading information that could help to cut down criminal activity in the sector.

Accident management group Accident Exchange, which cannot use the database at present, cites recent research that indicates the average British motorist may have to pay up to £70 more for their car insurance policy as a result of uninsured drivers.

Moreover, the organisation estimates that if companies like itself were given equal rights to access and update the register, car insurance premiums may drop by approximately 20 per cent.

"If we could view and post details of suspicious claims, postcodes, streets and even phone numbers at the time of the reported accident, the loophole currently being exploited will be dramatically closed," said Steve Evans, Accident Exchange's chief executive.

"At the moment, intelligence is far too restricted to proactively dent the criminal activity."

In related news, meanwhile, product research analyst Defaqto recently claimed that price competition between companies offering online car insurance discounts is helping to keep industry premiums down.

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