Accidents involving uninsured drivers cost �500m a year

At present, it is not an offence to own an uninsured vehicle only to be caught on the roads driving without insurance.

Combining vehicle registration details with insurance industry records could allow uninsured owners to be fined through the post, the ABI said.

The ABI added that a law change could cut uninsured driving costs by �100m.

Very slim

In total, accidents involving uninsured drivers are estimated to cost �500m a year, adding �30 to average motor premiums.

But the ABI said that few uninsured drivers are caught.

"The reality is that the chances of being caught driving without insurance are very slim - police rarely make stops to check if drivers are insured," ABI spokesman Malcolm Tarling told BBC News.

"By making it illegal to own an uninsured vehicle, detection rates could shoot up because we have the information to check instantly if a vehicle is insured."

Mr Tarling added that law breakers could be sent fines through the post and that a similar system is already in place to punish anyone failing to renew their road tax.

Consultation

The ABI's call for law reform is part of its submission to the government consultation on how to tackle uninsured driving.

Last August, the government commissioned a report from academic Professor Greenaway into uninsured driving.

Professor Greenaway concluded that uninsured motorists are many times more likely to have been convicted of a drink-driving offence or driving an unsafe vehicle.