Canadian Underwriter

Super Technology to the Rescue

August 20, 2010   by Suzanne Sharma

Print this page

Imagine having the ability to save the industry time and money, as well as protect against theft and loss. Well, brokers, carriers, and fleet companies might be able to do just that thanks to VerX DLV, a driver’s licence verification software.

Bob Dameron, (seated) George Sutej, (standing)

Bob Dameron, Executive Vice President, VerX Direct Corp. (seated) George Sutej, President and CEO, VerX Direct Corp. (standing)

In a society where 1 in 10 drivers are on the road with a suspended licence, and unlicensed drivers are three times more likely to be involved in a collision, according to Mothers Against Drunk Driving (MADD), some might say this software was long overdue.

“[The goal was] to help the industry reduce the overall risk and expenses associated with suspended drivers,” says Michael Damm, president at ISB, a supporter and promoter of VerX DLV.

The insurance industry loses almost $1 billion (CDN) each year in Ontario alone due to unlicensed drivers, according to Transport Canada. This software is aimed at mitigating this loss by keeping these high-risk drivers off the road.

Simply input the driver’s licence number and client’s date of birth, and in about three seconds VerX DLV can tell if a licence is fake, suspended or invalid. The technology–accessible via web or desktop through systems integration–is the first of its kind in North America.

At the moment, insurers, underwriters, and even brokers can purchase an “abstract” (a brief summary that assesses the risk of a driver, including accidents and convictions), which costs $20 on average, and can take about 24 hours to process.

“While VerX DLV does not replace the use of abstracts, it does enhance the use of them because it immediately checks whether a driver’s licence is valid,” says George Sutej, CEO of VerX Direct Corp.

[The goal was] to help the industry reduce the overall risk and expenses associated with suspended drivers.

If the licence comes up as invalid, for example, then it might omit the need to obtain an abstract. However, if the licence is valid, then it’s advised to proceed with an abstract because VerX DLV doesn’t have the ability to evaluate the risk of a driver.

“There was a need for this product within the industry,” says Damm.

Both adjusters and underwriters can utilize this software and reduce overall losses, whether processing a claim or renewal.

Brokers, who are at the front end of the industry, can use the program so that when a client visits them for auto insurance they can verify their licence (prior to selling a policy), adds Damm.

Also, brokers can better service their clients by protecting their client’s fleet against loss. Large trucking companies, for example, can utilize VerX DLV to keep tabs on drivers between abstract checks.

If a driver is stopped with a problem licence, the vehicle and cargo can be impounded for 45 days on average–a huge cost, says Bob Dameron, executive vice president at VerX Direct Corp. “We can do checks one at a time, or entire fleets of drivers in a matter of hours.”

Another example is car rental companies, who lose millions of dollars each year due to theft when people rent vehicles and steal them.

“We are checking licences to make sure the fraud factor is ruled out and that the licence hasn’t been cancelled between provinces,” says Dameron. “This type of loss ultimately costs the insurance industry, which then results in higher premiums for everyone.”

10 Ways to Lose Your Driver’s Licence

  1. This overview of reasons for licence suspension might surprise you.
  2. High-speed driving
  3. Criminal charges
  4. Demerit points
  5. Medicals reasons (from a broken leg to cataract surgery)
  6. Unpaid traffic fines
  7. Failure to pay child support or alimony
  8. Missed renewal dates
  9. Novice driver violations
  10. Failure to pass a driver retest
  11. Administrative driver’s licence suspension (ADLS), for example, if you fail to give a breathalyzer test, or if your blood alcohol level is over the legal limit

Source: Ontario Ministry of Transport

© Copyright 2010 Rogers Publishing Ltd. This article first appeared in the June 2010 edition of Canadian Insurance Top Broker magazine.

This story was originally published by Canadian Insurance Top Broker.