There are currently 2.5 million uninsured cars on the roads in the UK, according to the Private Motor Insurance Market Report.
The report, by Lake Market Research, compared DfT data on the number of private cars in use with insurance industry data on the number of private cars insured.
It found that just 91% of cars on the road were insured – compared to almost 100% in 2006.
At the same time, the report found that despite 6.9m motorists changing insurer last year in a bid to find a lower price, less than half trust price comparison websites. And a whopping 84% of drivers want car insurance to be more tightly regulated.
Lake Market Research managing director, Julie Hodgson, said: “Fundamentally there is a lack of consumer confidence in the motor insurance market due to a lack of transparency. The increase in the number of uninsured cars is a real worry. Are people being priced out of using their cars or are there many more people driving around without insurance?”
The research found that most people only changed insurers because they felt they were being ripped off. Between 2010 and 2012, insurers’ income from premiums increased by 2.7%, while claims costs (insurers’ outgoings) dropped by 16%.
Hodgson added: “This was offset by a 38% increase in commission and expenses payments. Despite many insurers reporting underwriting losses, it is clear that motorists haven’t bought the industry’s ‘we make losses on motor insurance’ message.”
The report also warned that, while some motorists are interested in telematics-based policies that fit a black box to monitor driving, many don’t realise the costs frequently attached to using the car at peak times.
Hodgson concluded: “Until they (insurers) abandon cynical ‘opt out’ clauses for policy add-ons in favour of more consumer-friendly ‘opt in’ arrangements, and adopt a more transparent customer service culture, their attempts to engage with motorists will be undermined by mistrust.”