Your Money: End of the road for no-cover drivers

The fixed penalty of £200 for driving without insurance is less than the cost of taking out cover

I am the motoring correspondent as well as the personal finance editor of The Independent on Sunday and, wearing both hats, it causes me great concern that so many people drive around uninsured. Figures from the Association of British Insurers (ABI) show that as many as one in 20 motorists don't have insurance - even though this is illegal.

So the announcement last Thursday by the Department of Transport that it has commissioned a review to crack down on uninsured driving is very welcome. The economist Professor David Greenaway will carry out the independent review of motor insurance and how it works - or doesn't.

True, motor insurance can be very expensive, but the trouble is that if a significant proportion of motorists don't have it, those that do end up paying even more. The ABI says uninsured drivers add an extra £30 a year to the premiums of the average motor insurance policy. And the cost of accidents involving them is estimated at £500m a year. It's hardly fair.

No matter how much you pay, it's not going to help you if you have a collision with an uninsured motorist. The Motor Insurance Bureau exists to compensate victims of accidents caused by uninsured or untraceable hit-and-run drivers. The extra premiums insured motorists pay go towards this fund, so even if you receive a payout, you end up paying for it in the long run.

But often you'll have to claim on your own insurance policy, anyway, if you don't want to spend months trying to pursue the driver through the courts for money he may well not have.

Improved detection of offenders is clearly vital; the Motor Insurance Database holds details of all individual and fleet motor policyholders, allowing police to carry out on-the-spot checks to see if motorists are insured. This database needs more funding to enable roadside checks to be increased.

There also need to be stronger deterrents to discourage driving without insurance. The current fixed penalty of just £200 is significantly less than the cost of taking out cover. So it's no surprise motorists try to get away with it.

Critically, the fixed penalty doesn't stop uninsured motorists from reoffending. Once they have a criminal record, they will be refused insurance, anyway, even if they mend their ways and try to take it out. This just aggravates the problem.

More adequate deterrents would be community service orders and the confiscation of vehicles in the case of repeat offenders. This might convince motorists that it simply isn't worth trying to cut corners and avoid purchasing cover because the penalties for doing so are just too severe.

m.bien@independent.co.uk