Uninsured Drivers


Establishing firm and reliable estimates of costs to society is complicated by the fact that information on the incidence of driving without insurance is fragmented and incomplete. However, some costs are transparent, because uninsured drivers who are involved in road traffic accidents generate claims and the direct costs associated with a significant tranche of these claims can be identified. As with incidence, therefore, we can build a picture of costs by drawing on a range of data sources.

Most claims generated by uninsured drivers are handled by the MIB, which in turn is funded by a levy on individual motor insurance providers set by reference to their turnover. The MIB levy in 2003 amounted to £250 million, up from £34 million in 1991 and £100 million in 1995. Although the average cost per settlement has increased in recent years, so too has the number of new claims, from 44,000 in 1997 to 53,000 in 2003

Because MIB's activities are funded in full by the industry, this £250 million represents an annual direct charge to honest motorists. However, it underestimates the full costs they bear. The reason for this is that many claims relating to incidents involving uninsured drivers are settled directly by individual insurance providers. There are in fact four other routes by which victims of uninsured motorists can secure compensation. The first is a so-called 'Article 75' insurer, where a policy is in place but the insurer could legally refuse to deal with any claims because, for instance, the policy has been obtained fraudulently. Under Article 75 of MIB's Articles, insurers have agreed to settle such claims directly. A second is referred to as a 'Road Traffic Act' Insurer. In such cases the use of the vehicle is not properly insured because conditions of contract have been broken, for example because a joy-rider has caused damage in a stolen vehicle. Under the Road Traffic Act insurers are obliged to settle such claims. Third, an individual could secure recovery from his/her own insurer. Finally, he/she could pursue a civil action against the liable party.