Friday, April 20, 2012

Not Buying Car Insurance

The recession means that money has become increasingly tight for all Brits, but while people are trying to cut back on unnecessary expenditure there are still certain things that are essential.

For car owners, it may be tempting to avoid buying car insurance but the money saved on these payments is a false economy.

 What does failing to buy car insurance cost society?

The average cost to the UK of uninsured drivers is approximately £380 million each year and adds approximately £30 to the cost of every insurance premium held by Brits. The government compensation scheme for those injured in an accident with someone who does not hold insurance, the Motor Insurers Bureau, also offers numerous settlements each year.

Directgov has also highlighted the fact that a motorist’s failure to buy cover can impact on other elements of safety on the roads. It pointed to a number of pieces of research that have concluded that uninsured drivers are more likely to be involved in accidents, fail to follow road signs or signals and to be involved in other criminal activities.

What is the law?

 In the UK, it is an offence to drive a vehicle on a road or public place without being covered by an insurance policy that covers third-party risk. The vehicle itself must be insured and the owner is responsible for ensuring this. If they own the vehicle and have not declared that it is ‘off the road’, then they will be liable for a fine and -potentially - the seizure and destruction of the car.

What penalties are there for failing to comply?

The government has set the maximum fine for failing to comply with the obligation to buy third-party insurance at £5,000. Offenders will also receive between six and eight penalty points on their license automatically. The court may also decide to order the immediate disqualification of the driver.

Police action often focuses on stopping vehicles to inspect their car insurance certificates, which Directgov reports leads up to 300,000 convictions each year. In addition to the powers of the court, the police may also issue a fixed-penalty to the driver. This consists of a £200 fine and six penalty points, allowing the police to take action far more quickly than through the courts.

 “The possibility of a fixed penalty gives the police an extra option for dealing with the offence concerned, but it doesn’t prevent the police’s ability to prosecute in appropriate cases when they consider that to be the best course of action, “ Directgov claimed.

How is the law enforced?

There are an estimated two million motorists in the UK who do not have valid insurance and the government is working hard at finding ways to reduce this number.

Following the Serious Organised Crime and Police Act 2005, the police have had the power to cross-reference the Motor Insurance Database and their Automatic Number Plate Reading equipment in order to identify cars that are on the road and have not been insured. It has been claimed that this gives rise to 1,500 seizures per week.

The Department for Transport has also announced a new battery of measures designed to crack down on the number of motorists who are flouting the law. It is embracing the fact that a series of holistic measures are required that target the wide range of different causes of this activity and boost detection.

Among the measures are efforts to make awareness of the insurance requirement higher among younger drivers, actions to drive down the cost of buying cover and increasing both the costs of being caught and the likelihood that this will happen.

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