By Ian Lewis
Insurance firms are predicting that motorists' premiums could be driven down when the government launches its searchable online database of licence records.
Due to be launched by the DVLA in March, the new system will enable individuals and companies to check for licence endorsements.
And the Association of British Insurers is forecasting that the move to put records online could help motorists save £15 a year on their premiums.
At the moment insurance firms cannot check licence details when they're selling policies and have to 'price in' the risk that drivers have made a mistake or lied to them about endorsements to get a lower quote.
Insurers will be able to price more accurately
But the My Licence system will allow them to check information online using through the gov.uk website using people's driving licence number, national insurance number and postcode.
It is also thought the move could help cut the cost of car hire by enabling rental firms to check drivers' details online instead of by phone.
Cabinet Office minister Francis Maude said: "It is great news that DVLA is about to launch online driving records which can be used by anyone with a driving licence as well as by the insurance industry.
"This will enable insurers, for example, to price much more accurately, because they will not have to take anything on trust.
"When people say what their endorsements are on their licences you can check it so you can price much more accurately and reduce the cost of insurance for most people."
The move is part of the government's digital agenda which is seeing services gradually being moved on to the internet.
Mr Maude said IT efficiencies will have helped the government save more than £1.2 billion by the end of 2014.
He added: "Our digital by default agenda is part of our long-term economic plan to tackle the deficit we inherited.
"To win the global race and save hard-working taxpayers more money, we need world-class public services available online 24/7 from anywhere.
"Back in 2010 our digital offering was limited at best and government IT was a by-word for disaster.
"There are still challenges but with the help of the GDS (Government Digital Service) I am determined that the UK will be the G8's most digital government by next year."
The driving licence's paper counterpart is due to be phased out by 2015 but the government has said there will be an assisted service for people who find it difficult to use the internet.