Uninsured motorists drive up premiums: As many as one in 10 drivers may be on the road illegally. Maria Scott hears how the rest of us are paying

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MORE people than ever are believed to be driving their cars without insurance, which is illegal, and other motorists will soon have to pay more for the consequences.

It is thought that up to 10 per cent of the country's 24 million motorists do not have insurance. Premiums often of more than pounds 1,000 a year, incorporating increases of up to 80 per cent, are thought to be discouraging drivers from fulfilling their legal duty.

The number of prosecutions for uninsured motoring is small as a proportion of the estimated transgressors. The Home Office says there were 317,799 actions in 1990, 206,498 of which resulted in convictions.

The Motor Insurers' Bureau (MIB), which administers a fund that pays damages to those hurt in accidents caused by uninsured drivers, expects claims to reach a record pounds 60m this year, 50 per cent more than last. The bureau has paid several injury claims of pounds 500,000 this year.

The money comes from insurance companies which, in turn, pass the charge to their policyholders. Roger Snook, the bureau's claims manager said that at present motorists pay about 80p per pounds 100 of their premiums to support the disaster fund.

But the increase in claims suggests this would have to rise by 25 per cent next year. The average motor insurance premium is believed to be about pounds 350; the increase in the levy would raise that by 70p.

Tony Baker, manager of public affairs at the Association of British Insurers, said: 'The effect on premiums (of) a rise in the levy is small but obviously we would prefer there was no increase.'

There are no precise figures on uninsured drivers, but the ABI says the figure is generally estimated at 10 per cent, equivalent to 2.4 million drivers. 'The estimates are based on the numbers thought to have no car tax.'

The organisation has no hard evidence of the trend for uninsured driving but Mr Baker said: 'You tend to find in times of recession that people try to economise, often in foolish ways.'

Mr Snook is convinced it is an important factor in the rising number of claims on MIB's fund. But there are other factors. Since the end of 1988, motorists have been obliged by law to have third party cover against damage to other peoples' property as well as injury to other motorists. This has increased claims, as has the increasing availability of legal expenses insurance. Solicitors are often employed to pursue claims and this raises the total amount sought from MIB.

The administration costs involved in tracing errant drivers who give rise to claims is also increasing. Many claims involve drivers who have insurance but whom the claimant has been unable to find. Claimants obtain money from the fund while MIB pursues the driver at fault.

The typical uninsured driver is a young male from a poor area, says Mr Snook. They have probably been hit harder than any other group by the premium increases imposed by insurance companies in the last year.

This point was emphasised last week by General Accident, which has launched a scheme in conjunction with British School of Motoring (BSM) whereby it offers discounts of up to 25 per cent to newly qualified young drivers who take a further course with BSM.

A 23-year-old Bristol man driving a Rover Metro would pay pounds 767 to insure his car under General Accident's standard comprehensive policy. He would save pounds 180 through the discount, but the BSM course, at pounds 95, would negate more than half of that saving.

Insurers deny that they are encouraging drivers, especially young men, to drive without insurance. 'That is absolute rubbish,' said Mr Baker. Insurers have been passing on premium increases to groups of policyholders registering the biggest increases in claims. It would not be fair to expect groups with records of low claims to pay the same as those with worse records, they say. Insurers have also targeted high-performance cars, of the type favoured by many young people, for the biggest premium increases. This is causing demand for these cars to fall.

Raymond Ellis, retail motor manager at General Accident, said he thought the police should do more to pursue and prosecute people who drive without insurance and that the existence of MIB should not be used as an excuse to let these people off the hook.

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