Car insurance 'not an expense to drop' in recession

The Motor Insurers' Bureau (MIB) – which provides compensation for victims involved in accidents with drivers who have no insurance or failed to stop – is urging drivers to keep covered, as 75 per cent of British drivers look to cut costs.

The UK has an estimated 1.7 million uninsured drivers – who put £30 on each car insurance policy for law-abiding drivers.

The Police are catching some 500 uninsured drivers a day through access to the Motor Insurance Database (MID) and Automatic Number Plate Recognition (ANPR) technology.

Last year, 185,000 cars were seized and 40 per cent of those were crushed. Over 230,000 people were prosecuted.

Simon Douglas, director of AA Insurance, said: "Customers who cancel their cover or don't renew run a serious risk of being stopped by the police.

"If you have no insurance, your car will be confiscated, is likely to be crushed and you will be prosecuted. It's just not worth the risk."

The AA highlighted the case of one driver who signed up for insurance, paid a deposit and then cancelled his direct debit once his documents were delivered.

Despite having an insurance certificate, he was still stopped and his car was confiscated.

Eventually the court fined him £300 and his license was endorsed with six points. Once caught, future insurance is harder and more expensive.

Anyone caught driving uninsured can now face a £200 on-the-spot fine and six points on their licence. Furthermore if the car is impounded, there is a £150 collection charge and £20 per day charged for storage.

Ashton West, chief executive of MIB, said: "In these times of economic uncertainty, it is no surprise that people are looking to cut back on spending wherever possible.

“However, this is no excuse to commit a criminal offence.”

Younger drivers are most likely to skip car insurance – as premiums for less experienced motorists are higher as they are far more likely to be involved in accidents.

There are already nearly 600,000 21 to 29-year-olds driving without insurance - representing 14 per cent of the total driving population but 34 per cent of all uninsured drivers.

Steve Sweeney, head of motor insurance for moneysupermarket.com, explained: “Insurance providers view younger drivers as high risk and often inflate premiums to reflect this.

“Despite this, young drivers should not use this as an excuse to get behind the wheel uninsured.”

However, Mr Sweeney is not calling for tougher penalties, but innovations to lower the costs for younger drivers so they are not tempted to skip insurance.

“We need a solution, not more fines. Some car insurance providers had piloted a ‘pay-as-you-drive' insurance scheme which saw lower premiums for Britain's younger motorists,” he said'

“It also made them think twice about driving their cars unnecessarily. I would suggest it is time for the insurance industry to revisit these innovative models to help drive down the cost of insurance.”


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