There has been a 70 per cent increase during 1993 in the cost of third-party claims made to the Motor Insurers' Bureau, which compensates innocent parties when no legitimate insurer can be traced.
The MIB is funded through individual motor insurance companies by all motorists and adds about 1 per cent to each driver's premium.
In 1993 pounds 85m was paid out compared to pounds 50m the year before, despite the fact that the number of claims only rose 17 per cent, to 40,000, in the same period. Since 1988 the cost of claims has rocketed by 227 per cent, while the average cost of insurance premiums has gone up by nearly 50 per cent, according to the Consumers' Association.
According to the RAC, in many parts of the country there is no stigma attached to driving with no insurance. A spokesman said many offenders regard themselves as being insured by the MIB.
The Association of British Insurers said fines for driving with no insurance were so low that for many drivers it was almost worth taking the risk.
The Automobile Association said the 3 per cent tax on insurance premiums introduced in the Budget would discriminate against young motorists and people living in higher risk areas and would further intensify the problem of uninsured motorists.
The Department of Transport said a working party would soon report on the possibility of introducing windscreen insurance discs. Many experts say these would not solve the problem because in Britain, unlike in most European countries, it is the driver who is insured, not the car.