Millions of motorists are expected to face a steep rise in the cost of new insurance policies later this year following the Government’s 2015 Budget announcement of a rise in Insurance Premium Tax (IPT) from 6% to 9.5%. The British Insurance Brokers' Association (BIBA) says the move will result in insurance cost increases for 19.6 million motorists when it comes into force from November 2015.

This is disappointing news for all motorists, not least because figures released from The AA in July show that the cost of annual comprehensive car insurance rose by 5.2% in the three months leading up to the end of June. The managing director of AA Insurance said: "The days of cheap car insurance premiums are over - price rises are inevitable." 

Increased insurance costs also cause concerns that the number of uninsured drivers on British roads will rise. Accidents involving those who drive illegally without valid motor insurance have risen dramatically in recent years and it is estimated that tens of thousands of motorists under the age of 30 are driving without insurance. 

Although the criminal sanctions include vehicle seizure, penalty points and fines, these are often of little comfort to someone seriously injured by an uninsured driver. Road traffic accident cases can be very stressful for the injured party and this is heightened when an uninsured driver is involved. 

Charlene McAuliffe, an associate in the personal injury team at Penningtons Manches, said: “The Motor Insurers’ Bureau exists to provide a fund of last resort for those injured by an uninsured driver. The MIB is funded by mandatory contributions from all insurers operating in the motor insurance industry, using the money that lawful motorists pay them in insurance premiums. With contingencies like the MIB in place, it is more difficult for people to obtain compensation for injuries and the individual is at risk of various criminal sanctions. 

“We encourage all motorists to ensure that they have valid motor insurance before they take to the roads. Although uninsured drivers are often just trying to save themselves money, there can be very serious implications should they injure another person.”