Nearly 2 million drivers dodge car insurance

The consequences of driving without insurance can be catastrophic. Yet according to The Motor Insurers' Bureau, there are an estimated 1.7 million uninsured drivers on the road in the UK alone. Victoria Bischoff investigates…

According to The Motor Insurers' Bureau (MIB), approximately 1.7 million people in the UK broke the law last year by driving without cover.

The report shows that roughly one in three of all uninsured drivers are in their 20s, while a worrying one in ten 18-24 year olds are not aware that it is illegal to drive without car insurance.

The study also found that 15% of drivers without insurance are in their 40s. Labelled as the 'squeezed generation', this group of people are often paying both for children in addition to subsidising elderly parents.

Amid fears that the recession may lead to an increase in the number of motorists cutting back on cover, the MIB has launched a new campaign urging drivers to 'Stay Insured.'

Who pays the price?

In 2008 uninsured drivers cost the industry around £380m. Today, this total is estimated to be nearer £500m.

The MIB, which compensates people in accidents with drivers without insurance, is funded by all UK motorists through a levy on insurers.

This means, as the cost of uninsured drivers rises, insurance companies are sadly forced to hike up the price of their premiums for all law abiding motorists.

Right now, this issue adds around £30 onto each car insurance policy per year - an extra expense few can afford in the current climate.

The consequences

The MIB campaign warns people of the penalties they could face should they get caught driving without insurance.

Not only could you have your vehicle seized, you are likely to receive a minimum of a fixed fine of £200 and six penalty points on your licence.

If you have only recently passed your test, this may mean you have your licence revoked.

Drivers who have their cars confiscated will also be liable for £150 in recovery fees and must prove they have insurance before they can get their vehicle back.

Cracking down

The government is determined to take a tougher stance against uninsured drivers to help protect innocent motorists.

By making it an offence to keep an uninsured vehicle, even if it is parked off the road and on private property, the government hopes to leave anyone with an uninsured vehicle nowhere to hide.

This new legislation from the Department for Transport is expected to come into force by the end of the next financial year.

According to MIB, only 60% of motorists think that they are likely to get caught driving without insurance.

However, since the introduction of the Motor Insurance Database and Automatic Number Plate Recognition, it is now much harder for drivers without insurance to avoid prosecution, with the police seizing as many as 500 uninsured vehicles every day.

Cut your costs, not your cover

If you're concerned about rising car insurance costs, here are five ways you can help drive down the price of your premiums without cutting back on cover.

1. Ensure your car is secure

All insurance policies are calculated based on risk assessment.

If you're able to reduce the likelihood you'll need to place a claim, your insurer may lower the price of your premiums.

Simple measures such as parking your car in a locked garage, fitting an alarm and using a steering lock should help to reduce the risk that your car will be stolen or damaged.

2. Add additional driver to your policy

Naming a partner or family member with a clean record on your insurance policy may slightly cut the cost of your car insurance.

This is because your insurer is likely to assume someone else is driving your vehicle for at least some of the time it is in use.

However, never name someone as your main driver if they are not. This is a type of insurance fraud known as 'fronting', and could have very serious consequences

3. Pay a higher excess fee

If you can afford to increase your voluntary excess, your insurer may reduce your insurance costs.

However you must ensure your excess amount remains at an affordable level. If you don't you could face a serious financial disaster should you have an accident later down the line.

4. Pay for your policy in one lump sum

Be aware that your insurer may charge you for the privilege of paying for your car insurance in monthly instalments.

Therefore, it's a good idea to pay for your policy in one go.

If you can't afford to shell out the whole amount up front, consider using a credit card that offers 0% on new purchases. You can learn more about how these clever cards work in my article 'The cheapest way to borrow now'.

5. Shop around

Finally, when it comes to car insurance companies, loyalty is rarely rewarded. It's therefore vital you do your homework and shop around before you buy.

Using an online comparison service is a quick and easy way to compare a range of quotes and hunt down the best deal for you.

Steve Waller, Head of Insurance at BeatThatQuote.com, says: "It's bad enough having to foot the bill for uninsured drivers - don't make it worse by paying more than you need to."

If you want to find out more about how to slow down accelerating car costs, you can read Laura Starkey's article, '9 ways to cut your car insurance costs,' or check out my article 'Six ways to put the brakes on car costs'.

**This material is for information purposes only and should not be considered financial advice. We strongly encourage our readers not to rely solely on this content, but to seek independent advice when making financial decisions.**