Uninsured drivers costing millions

Uninsured drivers in the UK are costing the rest of us millions in higher premiums each year, but as Sarah Routledge discovers the insurance industry and motoring organisations are trying to bring about change.

According to figures from the Motor Insurance Bureau, the UK has one of Western Europe's worst records for uninsured driving, with one in 20 motorists driving uninsured cars.

As uninsured drivers are ten times more likely to drink drive and three times more likely to be convicted of driving without due care and attention, it is not surprising that one in ten motorists have been involved in accidents with uninsured drivers.

An accident with an uninsured driver can prove very costly, as even if your insurer is prepared to pay for the damage, you will lose your no-claims bonus.

And if you only have third party insurance on your vehicle, your insurer is not likely to pay for repairs at all – you will have to make a claim to the Motor Insurer's Bureau (MIB) instead.

But even if you are never in an accident, uninsured drivers still cost you money.

All insurers must belong to the MIB, which pays for claims from victims of hit-and-runs or those who have had their vehicle damaged by an uninsured driver, and contribute to its funding.

This costs drivers around £500 million a year - or around £30 on every motor insurance policy.

Although the figure among the general driving population puts uninsured drivers at around a fifth, this rises to a third among young people.

Young people – particularly young men between the ages of 16 and 25 – are often caught out because they can afford the car, but not the insurance that comes with it, according to motorists' organisation RAC.

"They don't understand that it is not just there in case of damage to their car, it is there in case they hurt someone," says Sheila Ranger, from the RAC.

"Many don't think they are harming people by not taking out insurance and once they go out and are not caught a few times, they think it is alright.

"But if there were more traffic police, they could catch people the first time they tried it and could nip it in the bud."

Ms Ranger explains that although driving without insurance is a criminal offence, the fine is usually much less than the cost of insuring a car – so there are some drivers, particularly younger people for whom the cost of insurance is particularly high, who would rather take their chances in court.

Although it is difficult to get official figures because police are not obliged to keep numbers of uninsured drivers – something the RAC would like to see changed – there may be fewer motorists without insurance on the road because of recent changes to the law, Ms Ranger adds.

"The police now have the power to seize the vehicle and that seems to put people off. Until now, the fine has been less than the cost of insurance, so young men especially will take the risk," Ms Ranger says.

But the prospect of their beloved car being taken away and possibly even crushed, seems to be having an effect.

The best way to cut the number of uninsured drivers is to help young people understand the need for insurance. This could be through their driving lessons, the RAC said.

The insurance industry is well aware that of the problem of getting younger drivers to take up insurance, the Association of British Insurers (ABI) says.

According to a spokesperson, insurers are tackling the issue in a number of ways.

"We are working very closely with the police to enable them to use the motor insurance database [a database available to the police and public online which can immediately identify whether a car is insured by inputting its number plate] so that drivers know that there is a much better chance motorists will get caught."

He added: "We are also pushing for bigger fines. At the moment it is around £200, which we don't think is enough of a deterrent."

As for the problem of extremely high premiums for young people, the ABI says policies are priced according to risk.

"Insurance is much more for young people, but the only way to lower it is to bring the accident rate down. We are working with the government to bring it down," the spokesperson adds.

The government is proposing extra driving lessons for learners, including potentially lessons in driving in difficult conditions in order to reduce the accident rate in motorists who have recently passed their test.

And many insurers now recognise schemes such as Pass Plus, which offer advanced driving lessons to drivers who have recently passed their test, which will also lower premiums for younger motorists, the ABI says.

The ABI also says that younger drivers could look into innovative insurance policies such as Norwich Union's Pay as You Drive policy, which offers lower premiums to low-mileage motorists, or More Than's DriveTime, which gives discounts to younger drivers provided they agree not to drive at night, when the majority of accidents occur.

The British Insurance Broker's Association (Biba) is also campaigning for more awareness of the problem and is calling on the government to take the issue more seriously.

Graeme Trudgill from Biba says: "We want driving uninsured to be a serious offence.

"New laws are a serious deterrent as now your car can get crushed, but non-one has been promoting them and we would like to see an advertising campaign similar to other government safety campaigns."

Biba is also pushing for an enforcement agency set up, with the DVLA and the police working together to catch uninsured drivers using a national database – much like the one used to catch those not paying their TV licence, or their car tax.

If you do end up a victim, there is help available, Biba says.

"If you have comprehensive insurance cover, you can claim in the normal way," Graeme Trudgill explains.

"If you are third party, and you can't trace the driver, the Motor Insurance Bureau is set up to help.

"To make a claim, fill in a form, which you can get from their website. You can also call for advice.

"It should not be difficult, as they have been helping people from 1946 – they try to make it all as easy as possible."

The MIB advises to try and find out if the other motorist is insured first, so try and get as many details as possible in the case of an accident. You should also make a complaint to the police, as refusal to give insurance information is a criminal offence under Section 154 of the Road Traffic Act 1988.

It is also important to contact your insurers, as even if they will not cover you, you are obliged to report all accidents. And keep as much documentary evidence as you can relating to your losses.

The good news is the insurance industry and the police are working to bring the figures down, and recent data suggest they are having some success.

The MIB says that the level of claims made as a result of accidents involving uninsured drivers fell by 5.8 per cent in 2007. In financial terms, the reduction equates to savings of at least £30 million per year.

The police seized over 150,000 uninsured vehicles in 2007 – that's one vehicle every three minutes – and 40 per cent of these were crushed.

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