Driving out the uninsured

John Parker explains why a range of tough new measures must be introduced to combat the perennial problem of motorists taking to the road without insurance cover

The demand for action to reduce uninsured driving in the UK has never been greater. The government-commissioned review chaired by Professor Greenaway; the Association of British Insurers' own recently launched campaign to raise awareness of the issue; a campaign being run by a national newspaper; and an early-day motion signed by 80 MPs have all raised the profile of this problem to an unprecedented level. And the ABI's proposals to the Greenaway review set out what we believe needs to be done to reduce this hidden menace on Britain's roads.

Readers of Post Magazine will be familiar with Britain's poor record on uninsured driving. Some one in 20 drivers - that's 1.25 million people - are estimated to be driving without insurance. Accidents involving these drivers cost in the region of £500m a year - equating to an extra £30 a year on top of the honest motorist's premium.

But, of course, this crime's costs to society go far beyond higher insurance premiums. Uninsured drivers make our roads more dangerous. Often, uninsured motorists also have no road tax or MOT. Therefore reducing uninsured driving will not only lead to cheaper insurance premiums - it will also improve road safety.

Insurers have long recognised this problem. Hence the establishment in 2001 of the Motor Insurance Database, which reflects insurers' determination to tackle uninsured driving head-on. With the MID now attracting over 700,000 police enquiries a month, it is proving a crucial resource in fighting this battle. We need to ensure that it is used to maximum effect.

Detection

The fact is that there is no 'silver bullet' that will solve this problem on its own. Windscreen insurance discs and higher fines may have a part to play, but they are not in themselves the answer. The Greenaway review must focus on improving the detection regime and identifying a wider range of more effective deterrents.

Professor Greenaway's remit requires him to consider the merits of moving towards a system of insurance of the vehicle, rather than the UK's current driver-based regime. Our submission argues against this for the following reasons.

Research that we have commissioned shows that compliance across Europe varies widely. A vehicle-based regime does not in itself drive greater compliance; changing the basis of the UK's system could lead to the serious problem of underinsurance, where policyholders fail to declare higher-risk drivers in order to benefit from unfairly low premiums. In any case, the MID already provides a framework for collecting vehicle and driver information.

Continuous enforcement

A key weakness in the current system of enforcement is the lack of any continuous monitoring. Rather, evasion is detected in one of two ad hoc ways: either when a serious accident occurs involving an uninsured driver and their insurance status is discovered; or at roadside insurance checks by police, carried out as part of more general enquiries.

Our own research shows that those European countries with the lowest levels of uninsured driving all match vehicle and insurance database information to provide continuous monitoring. In the UK, matching existing information from the MID against Driver and Vehicle Licensing Agency vehicle tax records would highlight taxed vehicles on the road without insurance. This system would enable offenders to be targeted with warning letters - and, potentially, fines if a warning does not trigger compliance. This would, however, need to be combined with a government commitment to giving the police sufficient resources to focus on tracking down and prosecuting persistent offenders through roadside checks.

More effective deterrents

The current penalties for uninsured driving do not reflect the seriousness of the crime, or act as a sufficient deterrent - a fact backed up by research we have conducted into gathering the opinions of uninsured drivers.

Perhaps not surprisingly, the research revealed that uninsured drivers believe the chances of being caught are low - and the low levels of average fines make it a risk worth taking in any event. In addition, the range of sanctions available to magistrates is very limited: only financial penalties and penalty points.

What is needed is a range of sanctions that enable the courts to tailor a penalty to hit the offender hard. Magistrates should have the power and determination to award a fine at the upper end of the current scale (£5000) where appropriate. And new options, such as community service, which would eat into valuable leisure time; back-payment of an insurance charge; and confiscation of vehicles for repeat offenders, should be considered.

The more systematic use of civil debt recoveries by the Motor Insurers' Bureau and insurers themselves would significantly increase the impact of causing an accident while driving uninsured. Even if offenders do not have the funds to contribute significantly to the cost of damage, a clear signal will be sent that they could be pursued for the costs of any claim.

Responsibility for tackling this problem cannot be laid solely at the government's door. Insurers need to ensure that it is made as easy and straightforward as possible to obtain motor insurance. They also need to continually review their own practices and policy wordings, in particular to reduce the risk of otherwise law-abiding policyholders finding themselves 'accidentally' uninsured. We also need to ensure that vehicle insurance remains as affordable as possible by challenging costly and unnecessary new burdens on motor insurers.

Furthermore, companies should continue to support the work being undertaken by the MIB, in partnership with other stakeholders, to guarantee that the MIB's processes provide a speedy and high-quality service to the victims of uninsured motorists.

The Greenaway review offers a breakthrough opportunity to significantly reduce uninsured driving. We cannot afford to waste it. In the coming months, we - as the industry's representative voice - will be stepping up the momentum for change that now exists.

Acceptance of uninsured driving as a problem we have to live with is now no longer an option - it's time for zero tolerance.

- John Parker is head of general insurance at the Association of British Insurers.

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