Memorandum by Direct Line (TLE 23)
TRAFFIC LAW AND ITS ENFORCEMENT
1.1 This review is the submission of Direct
Line in response to The House of Commons Transport Committee Inquiry
on Traffic Law and its enforcement. Direct Line started in April
1985 and today is the UK's largest private motor insurer with
over 5.5 million active policies in the UK. The company has pioneered
selling insurance products direct to the consumer by phone and
internet. Our business interests include motor, home, travel and
pet insurance, vehicle breakdown cover and life insurance. The
response from Direct Line is concerned with how appropriate current
enforcement priorities impact on uninsured driving, and some proposals
for alternative remedies.
1.2 Motor insurance was made compulsory
under the "Road Traffic Act 1930". It was introduced
following increasing number of road accidents where victims were
left uncompensated for injuries to their person or damage to their
property. Compensation was often unavailable, as drivers often
did not have the resources necessary to cover the significant
one-off costs associated with motor accidents.
1.3 UK statistics on incidents of uninsured
driving suggest that 5% of drivers on UK roads are uninsured.
The costs imposed on industry by incidents involving uninsured
drivers are shared between costs covered by insurers through the
Motor Insurance Bureau and costs covered directly by insurers
where there's evidence of an earlier insurer or policy. This overall
financial burden on the industry is estimated at £400-£500
million per annum or on the honest motorist of £30 per year
on their premium.
1.4 Direct Line believes that it is essential
a range of effective deterrents are in place to tackle the problem
of uninsured driving and that the profile of enforcement is made
a more significant priority with other driving offences. The incidents
of police action on licence and insurance offences has fallen
over the last 10 years with the average penalty fine for driving
without insurance cover has fallen in real terms over the same
1.5 It is important that the perception
is challenged that uninsured driving is a "victimless"
crime. This evidence of a falling level of detections, a level
of fines not proportionate to the seriousness of the crime and
an increasing financial burden on the honest motorist, clearly
suggests a rising level of uninsured driving and that a review
into effective deterrents is needed.
1.6 The ultimate goal for an effective penalty
and enforcement policy must be for motorists to take responsibility,
change behaviour and abide by the requirements to drive with motor
insurance. It is crucial that a policy is adopted that incentives
the uninsured driver to recognise their responsibility towards
the "honest" motoring public and where that is heeded,
sufficient deterrent is applied through enforcement that encourages
good driver practice.
1.7 Direct line favours a number of proposals
that could help to bring about a more effective system of changing
1.7.1 Appropriate fiscal remedies: courts
to have a flexible approach to fines that incentivise against
persistent offenders and introduce equality between fines and
motor insurance cost.
1.7.2 New approaches: a parallel approach
to fiscal enforcement measures that draws across other procedures
to ensure motorists understand the severity of uninsured driving.
2. CHANGE DRIVER
2.1 Direct Line supports measures that have
the objective of improving driving behaviour, which here is to
ensure the requirement of mandatory insurance whilst driving.
The role of penalties and other incentives is to encourage and
reinforce compliance and to dissuade those from driving if insurance
is unaffordable or not considered necessary. Aims are different
according to whether you are an "offender"where
penalties are to encourage greater compliance, or to deter re-offendingor
the "honest motorist"where penalties act to provide
reassurance and protection. Behavioural, social and economic factors
will contribute to the decision not to purchase insurance provision,
evidenced on the one hand by individuals unable or unwilling to
afford the cost of insurance, to those who may simply have forgotten
to renew their policy. The more serious and frequent category
of uninsured drivers are those who have a persistent record and
attitude to committing driving offences and break other road traffic
laws such as driving a stolen vehicle or driving whilst disqualified
at the same time. The view of Direct Line is to progressively
encourage driver behaviour to the purchase of insurance and a
penalty system that can assist in a change of behaviour.
2.2 Most individuals are risk averse and
even a small threat of detection with an accompanying stigma of
breaking the law will have the effect of deterring such activity.
The effectiveness of introducing a new regime
of enforcement measures against uninsured driving will be blunted
by a lack of commitment to driver education and re-education in
the same way that policies in other areas of road policy and safety
have been endorsed by media messages to deliver changes in driver
attitude and behaviour.
2.3 Motor insurance is one of the few classes
of insurance, which is compulsory in the UK. The Road Traffic
Act requires all motorists to be insured against their liability
for injuries to others (including passengers) and for damage to
other people's property (third party liability cover) resulting
from use of a vehicle on the road. Most motorists go beyond this
minimum requirement and opt for the additional security afforded
by more comprehensive cover. Other compulsory requirements for
driving in the UK including holding a current driving licence,
vehicle excise duty and a MOT certificate. Penalties for illegal
driving include penalty fines and points.
2.4 It is our experience that the current
level of fines levied by the courts for uninsured-driving offences
is around £150. The options available to the courts in cases
of uninsured driving should be as broad as possible in order to
tailor the penalty to the specific circumstances of the offence
and the individual concerned. Since the level of fines which may
be imposed by the courts need to take into account the ability
of the offender to repay the fine, in many cases the fines imposed
are less than the insurance premium would have beenhence
for some individuals there is a financial incentive not to pay
3.1 Direct Line identifies two broad themes
in "remedy solution" that could introduce further enhancements
in the detection and enforcement of uninsured driving. This involves
increasing the resources at the detection, enforcement and recording
phases of uninsured driving incidents and the introduction of
tailored remedies for the punishment of first, and the on-going
deterrent of repeat offences, of driving without insurance.
3.2 With continued investment in databases
and police resources, the opportunities of detecting uninsured
drivers should increase. Second; a range of other measures including
a review of the level of fines that reflect the seriousness of
the offence, the purchase cost of a suitable motor insurance policy
and the costs that insured drivers impose on all law-abiding drivers.
3.1.1 Direct Line believes that the Motor
Insurance Database (MID) has a continuing role in assisting law
enforcement agencies identify uninsured drivers. The database
is operated by the Motor Insurer's Information Centre (MIIC) and
allows enquiry's to be made of a vehicle registration mark (VRM)
to confirm the existence of an insurance record.
3.1.2 The information on the database is
accessible to the police and motor insurance companies and is
relevant to validate cover. It includes:
Policyholder name and address.
Vehicle make and model.
3.1.3 The database allows police at the
roadside to determine the insurance record on the database for
that vehicle. If the police check reveals a vehicle's details
are on the system then it is likely that the driver is insured.
Likewise, if the vehicle's details are not on the system then
there is likelihood that the driver is uninsured. In these circumstances
the driver will be required to present their insurance documents
within seven days.
3.1.4 Direct Line identifies that a key
benefit with the database is that because it acts as a filter
of insured and uninsured drivers, law enforcement agencies around
the country are only likely to be dealing with the paperwork and
administration relating to uninsured driving. This makes effective
use of police time and resources in catching uninsured driving
and reduces the inconvenience and "stigma" to the honest
3.1.5 Direct Line believes that moving to
a purely electronic system in which the Driver and Vehicle Licensing
Agency (DVLA) would have full access to registered keepers of
vehicleslinking this information to details of those with
insurance and an MOT certification (where appropriate) would use
this information pro-actively to identify and pursue "offenders".
In Germany, the licensing, tax and insurance arrangements of vehicles
are input into a central database allowing the visible identification
of "unlicensed vehicles" and the appropriate actions
by authorities. Direct Line believes that a "joined-up"
system between the leading agencies would eliminate the requirement
for an insurance certificate to be produced at the time of vehicle
licensing as the DVLA and Post Office would have access to insurance
status information via the motor insurance database. In the detection
of "uninsured driving", proactive enforcementthrough
roadside checks by police and use of "intelligent" cameras
linked to the central networkwould be targeted at vehicles
not identified on the database with the likelihood that the driver
is uninsured. This would also arrest the decline in enforcement
proceedings of uninsured and unlicensed driving compared to the
increase in cost to the industry and consumer from claims arising
from such driving behaviour.
3.2 ROAD TRAFFIC
Direct Line believes that it is important for
a range of options to be available to the Police and the courts
in order to tailor the penalty to the specific circumstances of
the offence and the individual concerned.
Penalties and sentences
3.2.1 Research undertaken in 2001 by Direct
Line/Mori concluded that public opinion supports tougher measures
to tackle the problem of uninsured driving: 44% of drivers want
more police spot checks, 30% feel fines should be increased, while
28% favour imprisonment for persistent offenders.
3.2.2 With courts benefiting from a range
of fine scales reflecting a flexible approach to the ability of
the offender to repay the fine, continued evidence suggests that
the level fines imposed remain at a level considerably less than
the insurance premium would have cost the offender to purchase.
In 2001 the average fine for uninsured driving was £150,
a third of the average cost of a year's premium for non-comprehensive
insurance. Though the current level of the fixed penalty notice
available to the Police to set at the roadside higher than the
average court fine, this also remains low compared to the cost
of non-comprehensive insurance. The ability to successfully challenge
a fixed penalty notice in favour of a court fine on the "ability
to pay" principle, further enhances the message to those
"more risk averse" and complacent to the threat of detection,
that the offence of uninsured driving is not considered important
hence for some individuals it is not rational to pay for insurance.
3.2.3 Direct Line favours a range of fines
available to the courts that in determining an appropriate level
for an offence of uninsured driving should reflect the seriousness
of the offence and the costs that this offence imposes on insured
3.2.4 The average fine level for a first
offender should mirror the cost of non-comprehensive motor insurance
where an offender provides limited scope or inclination towards
the retrospective purchase of insurance.
In cases where an offender provides commitment
to the purchase of insurance, the flexibility in the fine system
would provide for a level of fine and its proportionality to be
directed towards the purchase of appropriate cover.
3.2.5 In the case of second or continued
repeat offenders with public opinion suggesting a strong approach
to enforcement for repeat offenders, Direct Line believes that
it is important that a custodial sentence should be available
for the most serious of offences.
3.3.1 Direct Line supports an option available
to the Courts to empower them to use community sentences in cases
where imprisonment is not available, or appropriate. Direct Line
believes that it is possible to link a suitable fiscal penalty
with a community penalty service order requiring the offender
to participate in local road safety initiatives, such as around
schools and with peer groups. We accept, however, that in some
cases the offender may not be physically fit to carry out a community
3.3.2 Direct Line appreciates that a move
towards introducing a community penalty scheme is most appropriate
where the court determines that a defendant is unlikely to be
able to pay a fine at least equivalent to the annual third party
insurance premium payable. The move to a community penalty scheme
would act as a punishment and deterrent in such circumstances
and would go some way to compensate "society" for the
costs of the crime.
3.4.1 Direct Line recognises that permanent
forfeiture of the offenders owned vehicle is normally only used
for the most serious of offences. We suggest that this option
should therefore only be used when a driver is involved in an
accident causing damages to another party or is a significant
repeat offender. In such cases the proceeds of the sale of the
vehicle could be used to defray the costs of the claim made to
the MIB for damages. The proceeds could be paid to the MIB and
would help to minimise the extent to which the cost of uninsured
driving is subsidised by the average motorist.
3.4.2 Direct Line would welcome the introduction
of a new penalty of temporary forfeiture of the offenders owned
vehicle. We believe that such a proposal would be a useful stand-alone
penalty for drivers caught without insurance who are unlikely
to be able to pay a "suitable fine". We believe that
the proposed immobilisation at the defendant's home or another
suitable location would be helpful and that the defendant would
be responsible for any administrative or storage charges. We suggest
that before the vehicle is returned, the defendant should be required
to provide evidence that insurance cover has been arranged.
3.4.3 Direct Line believes that the forfeiture
of the offenders owned vehicle immediately removes the "means"
for an offender to commitment the same offence and is a clear
demonstration to the general public of action being taken against
the offence and for their continued protection.
3.5.1 Improving the detection rate of insured
drivers coupled with a suite of effective and robust penalty measures
will demonstrate an effective system of enforcement and instil
behavioural changes towards the significance of the offence. In
this response, mention has already been made on the carrying by
drivers of insurance documentation at all times.
3.5.2 Direct Line also identifies that a
legal requirement for individuals to carry insurance documentation
when driving, would further identify uninsured drivers at a roadside
check. This would increase the opportunities of detection, thereby
making more effective police time from "unnecessary"
administration and encourage their willingness to be directed
at uninsured driving in the same way as for other motoring offences
such as speeding and tax disc evasion.
3.5.3 Direct Line would also seek changes
to the regulations regarding motor insurance certificates which
would allow them to be printed in ways other than simple black
on white (as the current regulations prescribe). A change here
would allow Direct Line and other insurers to produce certificates
which would be less easy to forge and also addresses anomalies
in current rules which require insurance companies to provide
third party cover for consumers who are in possession of a motor
insurance certificate from that insurer despite the contract having
been terminated by either party.
3.5.4 Direct Line believes that to carry insurance
documentation could appear to be initially "unpopular",
it would seem unfair and provoke a feeling of "a social stigma"
for a driver with insurance to proceed through the police administrative
process in confirming information already identified on the MID.
Government would need to undertake consideration
of how all drivers should carry insurance documentation when driving
could be administered in the UK.
4.1 A successful policy of penalty and enforcement
in reducing incidents of uninsured driving must be based on adequate
resorting in the detection of this motoring offence and a suite
of effective remedies and penalties to act as a deterrent.
4.2 Direct Line calls for;
Improved co-ordination between the
databanks and information held by government agencies and the
MID to improve the detection of uninsured driving at roadside
A range of options to be available
to the Police and the courts in order to tailor the penalty for
uninsured driving to the specific circumstances of the offence
and the individual concerned. This would include reviewing the
value of fines to reflect the cost of insurance, the forfeiture
of vehicles, community service projects and measures to de-incentives
the crime and encourage behavioural change.
Consideration to be made on the benefits
of requiring drivers to carry insurance documentation with them