Blog
Driving without insurance - market failure?
16th February 2008
In Britain, every three minutes, the police find an uninsured car. Is the market for motor vehicle insurance failing? I am putting an article together for the next edition of EconoMax and I want to test the water by asking blog readers why they think the scale of uninsured driving in the UK is so high - one of the worst in the European Union.
The AA which gathers information for the police says that 150,000 uninsured vehicles were seized last year compared to 78,000 in 2007. In some towns and cities the percentage of drivers without cover is staggeringly high. In Bradord in West Yorkshire, the Motor Insurers’ Bureau (MIB) has said that the BD3 postcode area had 4,403 uninsured vehicles, which equates to 57.3% of all vehicles in that area!
Are uninsured drivers commiting a rational crime having weighed up the costs and benefits of their actions? I guess that rationality would involve considering the money saved from not taking out insurance set against the risk of detection and the penalties that might follow.
This BBC news av clip is quite good on the issue and this av clip looks at the work of the Met Police in taking uninsured cars off the road.
Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.