Cost Of Uninsured Drivers Could Hit £1billion By 2005 - Warns Direct Line

A report out today (Tuesday) from Direct Line, Britain's largest direct motor insurer, has revealed that by 2005 honest motorists could be forking out £60 extra on top of their insurance premiums to cover the cost of uninsured drivers. Currently drivers are paying between £15-£30^*.

Britain already has one of the highest uninsured driving populations in Western Europe. It is estimated that one-in-twenty vehicles on UK roads are uninsured, compared to less than one in every two hundred in Finland, and one in every five hundred in Germany. Greece is the only other European country with more uninsured vehicles than Britain.

MORI research, conducted for Direct Line, has revealed that 98 per cent of motorists believe that driving without car insurance is unacceptable in today's society. However, as many as one-in-ten also claim to know someone who drives a car not covered by insurance.

Steve Treloar, Motor Business Manager at Direct Line said:

''We must challenge the perception that uninsured driving is a victimless crime. The cost of uninsured driving is increasing the premiums of every honest motorist in Britain. Therefore it is essential that there are a range of effective deterrents in place to stem this growing problem.''

The report highlights that drivers also believe that effective measures must be in place to help reduce the number of people driving without insurance: 28 per cent feel that fines should be increased, and 23 per cent are in favour of imprisonment for persistent offenders.

The Motor Insurance Database (MID), which was announced last year and is due to go live on 1st July, could help turn the problem around. Mr Treloar added:

"The database will allow the police direct access to insurance details at the side of the road. This will make it easier to detect vehicles that potentially don't have insurance. We are hopeful that the database will also act as a deterrent and will enable us to reduce the financial burden currently imposed on law-abiding drivers."

Technical details

^* A levy is paid each year by insurers to the Motor Insurers' Bureau (MIB) - the organisation that administers the UK National Guarantee Fund to compensate victims of accidents caused by uninsured drivers. Insured motorists then have to foot the bill through higher premiums. In 1991 the annual levy was £39m, in 2001 it will be approximately £265m, and by 2005 it could be as high as £470m.

In 2000, the MIB estimated that the true cost of uninsured drivers was in excess of £400m i.e. twice the amount of the annual levy. The motor industry is hit twice because not only does it fund the MIB, it also loses out on premium income which it would otherwise have received had all motorists taken out insurance. If the current trend continues the total cost of uninsured drivers could reach £1billion by 2005.

The Motor Insurance Database will be run by the Motor Insurers' Information Centre (MIIC), a wholly owned subsidiary of the Motor Insurers' Bureau. The database allows enquiry by vehicle registration mark to confirm the existence of an insurance record.

A maximum financial penalty of £5,000 together with an automatic licence endorsement of 6-8 penalty points (option to disqualify if deliberate) can be imposed on an uninsured driver. However, current guidelines suggest a fine of between £50-£150 for an individual with a net weekly income of £100. This can be reduced to £35-£100 if the individual gives an early 'guilty' plea.

MORI conducted 2,012 telephone interviews with a representative sample of British drivers aged 17+ in October and November 2000. Results are based on all respondents unless stated. Data are weighted to the known population profile.

Motorists' views on uninsured driving

Key: * = highest region ~ = lowest region