This piece is by David Humphreys, director of automotive, UK and Ireland, LexisNexis Risk Solutions.
The growth of vehicle centric data to support motor insurance decisions comes at a time when insurance providers are facing new risks related to ever-more sophisticated vehicle technology alongside, and at odds with the growing risks related to poor vehicle maintenance as drivers cut back on car upkeep costs. The Motor Ombudsman has found more than 50% of garages and other vehicle repair shops have seen a steady decline in drivers maintaining their vehicles. And new research suggests 20% of UK drivers regularly ignore advisories picked up during their MOT.
It is this trend that is perhaps the most troubling for the motor insurance market. Insurance providers understand drivers face cost pressures and premiums have been falling which is good news for cash-strapped households.
The issue is that a vehicle that failed its MOT can only be driven in certain circumstances, whereas one with advisories can be driven and insured but if the advisory, such as a worn tyre is the cause of an accident and a claim, the insurance provider could refuse to settle. This is a scenario no insurance provider would want to see played out, yet MOT advisories for tyre defects is a growing problem.
From October to December 2024, government figures show 8.2m MOTs were carried out. While just under 500,000 passed on the first test, there were over 2m fails and a final fail rate of 23.3%. With each approved MOT certification there are often a couple of advisories – the most common advisories in 2024, were tyre wear, brake pads or discs, suspension, lights and corrosion.
Over 2.1m vehicles failed the MOT on tyre defects in 2023-24, from just over 2 million the previous year, and 1.83 million in 2019-20v. Over a third (36%) of the MOT failures for tyre defects had previously been flagged with tyre-related advisories.
This means there could be over 700,000 drivers of vehicles with poor tyres using the road network in the UK, in the full knowledge that the condition of their tyres poses a possible safety risk.
The risk of driving with worn tyres, especially in winter, does not need spelling out. Yet this is a risk that insurance providers have been blind to until recently.
However, it is now possible for motor insurance providers to gain an instant picture of MOT history and a risk score derived from this information, alongside Driver and Vehicle Standard Agency classifications when needed. Essentially, at the point of quote, insurance providers can know if a vehicle has passed its MOT, and if it passed with advisories, what were they?
When this MOT data is viewed alongside further detail on the status, value and history of the vehicle, motor insurance providers are in a more informed position to underwrite fairly and with more accuracy. In essence, they can access single-source, accurate, real-time data offering a 360-degree view of a car’s status, value and history, extending far beyond basic details like mileage and make.
The benefit of this knowledge for more detailed risk assessment and pricing accuracy is clear but it also presents an opportunity for insurance providers to engage with proposers to possibly incentivise them to act on the advisories rather than wait for the next MOT.
With this data on board insurance providers can even help ease household pressure by underwriting policies that reflect good maintenance standards. If insurance providers know a driver has no claims history, a good record of MOTs and vehicle maintenance, they will be able to price that policy more affordably.
In conclusion, the integration of vehicle-centric and MOT-derived data represents a major shift in how motor insurance providers assess risk and set premiums. As millions of UK drivers delay essential maintenance, particularly on critical components like tyres and brakes, the insurance industry faces an urgent challenge—but also a valuable opportunity.
With access to real-time MOT histories and advisories, insurers can better identify potential risks before they become claims, ensure fairer pricing while promoting road safety. More importantly, this data-driven approach enables insurers to reward responsible vehicle ownership with competitive pricing, encouraging drivers to address maintenance issues early.
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