Forum Brief: Motor Insurance

A wide-ranging review of the UK's system of motor insurance has been announced by the government.

The moves comes as ministers seek to reduce the number of uninsured drivers on Britain's roads. The review will be headed by economist Professor David Greenaway who will produce recommendations for improving the effectiveness of compulsory motor insurance.

Forum Response: Association of British Insurers

Mary Francis, director general of the ABI, said: "This review offers a breakthrough opportunity to reduce the problem of uninsured driving. This is not a victimless crime - the cost of accidents involving uninsured drivers adds up to an extra £30 each year to the premiums of honest and responsible motorists.

"The review will need to focus on detection and deterrents. We need to see a real commitment to improved detection of motorists who drive without insurance, and a wider range of penalties that act as real deterrents, such as community service orders, and confiscation of vehicles for repeat offenders.

"Motor insurers have invested heavily in the Motor Insurance Database. This contains details of motor insurance policies, and enables the police to carry out on-the-spot checks. We need to ensure that this key enforcement tool is used to best effect.

"The ABI will be playing a full part in the review, to ensure that proposals flowing from it reflect the most practical way forward in reducing this crime."

Forum Response: Norwich Union

Simon Machell, claims director of Norwich Union, told ePolitix.com: "We welcome any review to help tackle the problem of uninsured driving, the cost of which is eventually borne by insured drivers.

"We believe a key part of tackling this issue is deterring uninsured driving in the first place and setting more realistic penalties.

"New rules for penalties, announced in June, do at least provide a recognised structure for dealing with uninsured motorists - which is not the case at the moment - they don't go anywhere near far enough.

"The financial penalties need to be more punitive and until they are the problem is likely to persist.

"The fine is less than half the current average motor premium, which is about £500 a year, consequently uninsured drivers will think it's worth their while to drive without insurance and risk being caught.

"Significant sums of money have been invested in the Motor Insurance Database which will increase the chance of uninsured drivers being caught, but unfortunately these new rules mean the punishment meted out will in no way match that investment.

"I would like to see the fines at least at the level of the average motor insurance premium to act as a real deterrent because at the end of the day, the cost of uninsured motorists is eventually borne by insured drivers. Currently uninsured driving costs all those that buy motor cover £30."

Forum Response: Direct Line

Emma Holyer, motor spokesperson at Direct Line, told ePolitix.com: "The cost of uninsured driving is spiralling up and up, and it's honest motorists who end up footing the bill through higher premiums.

"Uninsured driving is not a victimless crime and it is essential that a range of effective measures are put in place to stem this growing problem.

"The time has come to start driving insurance cheats off the road and we welcome this review of motor insurance as a first step to achieving this ."

"MORI research conducted on behalf of Direct Line has revealed widespread support for tougher measures to tackle the problem of uninsured driving, 44 per cent of drivers want more spot checks conducted by the police, 30 per cent feel that fines are currently too low and should be increased, while 28 per cent are in favour of imprisonment for persistent offenders."