Consultation outcome

Government response to exclusion of uninsured drivers from property damage compensation

Updated 13 June 2025

Executive summary 

We ran a consultation on proposals to reintroduce exclusions for uninsured drivers from claiming Motor Insurers’ Bureau (MIB) compensation for property damage if in a collision with another uninsured or an untraced driver.  

This is done under the Uninsured and Untraced Drivers Agreements between the Department for Transport (DfT) and the MIB which set the conditions for the MIB to investigate and pay compensation.  The exclusion of property damage for such drivers was included in both agreements until 2017 but was removed because it was a breach of EU law. Now the EU law no longer applies, it would not be a breach to reintroduce the exclusion and return the agreements to the previous position.   

The consultation to reintroduce the exclusion received overwhelming support. The common theme expressed by respondents was that uninsured driving is unacceptable and such drivers should not be compensated for property damage. We will now work to reintroduce the exclusions into the agreements with the MIB. This does not require a change to legislation. It only requires amendments to the Uninsured and Untraced Drivers’ Agreements between the Secretary of State and the MIB.  

Removing this right for uninsured drivers demonstrates that the government is focused on tackling criminal behaviour and sensitive to regulations that impact negatively on the general public. The vast majority of law-abiding motorists pay for claims from uninsured drivers for property damage through their motor insurance premiums. 

The financial benefits might be limited, with possibly a small net benefit. It will, however, send a message that uninsured drivers should not benefit from being compensated by the fund of last resort for property damage. 

These actions will not affect the rights of uninsured drivers to claim compensation for personal injury as this was not included in this consultation.  

The equivalent exclusion contained in the agreements between Northern Ireland and the MIB was never removed. So, reintroducing it would bring Great Britain into line, so that the exclusion is UK-wide.   

Consultation responses 

The consultation received 90 responses, 86 from members of the public and 4 from organisations. 

Responses to main questions 

There was overwhelming support (94.4%) for the proposal to exclude uninsured drivers from compensation for property damage if they are involved in accidents with another uninsured driver. Of the 5 respondents who did not positively agree, 2 (2.2%) skipped the question for unknown reasons, meaning only 3 respondents expressed disagreement (3.3%). 

There was even greater support (96.7%) for excluding uninsured drivers from compensation for property damage if involved in collisions with an untraced driver. In this case only 2 respondents disagreed (2.2%) and one respondent (1.1%) answered “Don’t know”. 

All 4 organisations who responded supported the exclusion of property damage for uninsured drivers in accidents with both uninsured and untraced drivers.   

There was no evidence provided as to why uninsured drivers should be compensated by the MIB. 

Responses to open ended questions 

We asked the following question:  

If the requirement for the MIB to compensate uninsured drivers for property damage was removed, do you think there are other consequences we should be aware of? What consequences and why? 

For this question there were a range of replies but no consistent theme. Eight responses referred to aligning with the EU. Two responses stated that it could inconvenience travel in future and one thought there might be difficulties in Northern Ireland, and potential legal challenges if a party involved was from the EU. Four responses were critical of EU law and wanted the exclusion returned now we are outside that union. Six responses mentioned changes to premiums with 4 stating that insured drivers would benefit from reduced premiums and another response saying that this change would encourage drivers to be insured. 

Other or general comments 

Comments were made by over 50 respondents. The common theme was strong support. The widespread view was that uninsured driving is unacceptable and that those drivers are knowingly breaking the law. Several respondents thought that fines for uninsured drivers should be increased and a small number thought that personal injury compensation should also be denied. 

The MIB strongly supported the policy proposal on all grounds outlined in the consultation paper. The MIB were responsible for implementing this same exclusion until 2017, prior to when it was removed. The MIB confirmed that its implementation at that time did not cause any difficulties for them, nor did they see any unforeseen consequences with its reintroduction. They also added that reinstatement of the exclusion would support the MIB’s work with the police and the government to reduce uninsured driving. The MIB felt that the exclusion could help to reduce some of the costs associated with uninsured driving which ultimately fall on law-abiding drivers as higher premiums. MIB’s view is it is not fair that the majority of law-abiding premium paying motorists should cover the property damage costs of uninsured motorists. 

Government response and next steps 

The government welcomes the responses received to this consultation. Replies, as stated, were overwhelmingly supportive of excluding uninsured drivers from property damage compensation if victims of crashes caused by uninsured or untraced drivers.   

We believe uninsured drivers should not be able to benefit, in the same way as those driving lawfully. Plus as motor insurers contribute to the MIB fund, so in turn this impacts on law abiding premium paying motorists who insure their vehicles.  

This change will send a strong message about needing to comply with the laws of our roads and further discourage uninsured driving by removing a current benefit that uninsured drivers can receive. The change, as already stated, would not however affect the rights of uninsured drivers to claim compensation for personal injury from the MIB which is beyond our proposals. 

We will now reintroduce the exclusion of property damage for uninsured drivers. This exclusion will require amendments to the Uninsured and Untraced Drivers’ Agreements between the Secretary of State and the MIB. The government will work with the MIB make changes to the agreements at the earliest possible opportunity.