Why is car insurance important anyway?

Posted on 30 May 2012 by Tony Santos

Car InsuranceCar insurance tends to be a subject that polarises many people’s opinions; most tend to begrudgingly accept it as a necessity, while others feel as though they are having their pockets picked on an annual basis.

But why is car insurance important anyway? Are there any tangible consequences to not having it; or is it all just a load of “what ifs” being used to justify daylight robbery?

Well, the short answers to these questions are as follows:

  1. It is against the law to drive without car insurance.
  1. There are very real consequences, which extend further than whether or not you are involved in a car accident yourself.

Incidence & prevalence?

Despite this, the Motor Insurers’ Bureau (MIB) has recently estimated that up to 6% of vehicles are being driven without insurance on the United Kingdom’s roads. And accidents involving uninsured drivers do happen; such drivers are responsible for approximately 160 fatalities and 23,000 injuries every single year.

Criminal consequences?

One of the main problems is that most uninsured drivers do not feel as though they are criminals. But like it or not, this is exactly what the law defines them as. In fact, even a failure to buy third party protection insurance is an offence in itself. A common misconception amongst uninsured drivers is that “the penalty will be cheaper than the insurance”. Unfortunately, with a possible fine of £5,000 for anybody found flouting this requirement – this is quite simply not the case at all.

In addition to this, the consequences for uninsured drivers who cause a fatality can also be more severe. A new Road Safety act of ‘causing death whilst driving uninsured’ has been recently created. Those convicted face a mandatory driving ban of 12 months, as well as the possibility of up to 2 years in prison.

Who are the victims?

Victims of uninsured drivers can be categorised as either direct (I.e. those unfortunates who are involved in accidents) or indirect (i.e. virtually every insured driver – a point I shall elaborate on later).

Recent research has highlighted that uninsured drivers are more likely to be involved in an accident than those who are insured; this is a double blow to the direct victims, as it means that there is no insurance available to them should such an incident occur.

This has meant that government intervention has had to arrive in the form of an agreement with the MIB (made back in 1999); this ensures that such victims are compensated for their losses. This is done via a “safety net” of contributions made by all UK motor insurers.

As previously mentioned, practically all other insured drivers are victims of uninsured drivers; this is due to the fact that premiums need to be higher in order for insurers to cover the costs of the victim’s fund. It is thought that a typical insurance premium would be around £30 cheaper if such a prevision did not have to be made.

Future insurance?

The government are making an effort to crack down on the United Kingdom’s insurance evaders. This has been aided with the introduction of MIB Motor Insurance Database (MID); this utilizes automatic vehicle registration checks to see if adequate insurance is in place. Police also have the power to randomly spot-check vehicles to make similar insurance checks.

Although such measures may seem inconvenient to drivers, they do have very important aims which are in the best interests of road users as a whole!

About the author: Nathan Clarke is a professional guest blogger writing on behalf of experienced motoring solicitors Pannone, who’s website can be found here. He often leaves people regretting they asked the question “why is car insurance so expensive?”

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