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New rules that give car insurers access to DVLA data in order to cut fraudulent insurance applications could save up to £100 per policy, according to secretary of state for transport Patrick McLoughlin.
He said the decision, which takes effect in 2014, would "cut out fraudulent car insurance applications by cross-referencing driver data", saving up to "£100 per policy".
Up to 23% of motorists do not accurately declare their driving history to insurers, according to the Association of British Insurers, including thousands of disqualified drivers.
The system will work by drivers using their driving licence number when they apply for insurance, said the ABI. An automatic check will be made to the DVLA database, bringing back accurate information on licences.
Nick Starling, director of General Insurance at the ABI, said: "Being able to access the DVLA database will not only root out fraud but also make the process of applying for insurance faster, produce more accurate premiums and reduce disputes in the event of claims".
According to new research, business drivers and members of the public overwhelmingly support the planned changes.
A study of 17,833 AA members showed that 92% were in favour 'if it cuts down on fraud', with 72% strongly agreeing. Similarly, most voters (89%) said they had 'no problem' with providing their driving licence number to their insurer.
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