According to a report published by the Motor Insurers' Bureau (MIB), a fifth of young motorists are driving without insurance.
MIB is funded by motor insurers and set up to compensate those involved in accidents with uninsured drivers. The organisation has estimated that 250,000 people aged between 17 and 20 drive without any insurance in place.
The report also found that a tenth of young drivers claim not to be aware that car insurance is compulsory, and that this age group are four times more likely to be involved in claims.
Chief executive of the MIB - Ashton West, said: "Young people make up a significant number of uninsured drivers, and with one in five newly qualified drivers having an accident in the first year of driving they need to make choices based on the consequences of driving without insurance and not just on price alone."
A17 year old male can expect to pay as much as £2,000-£3,000 per year for car insurance, which according to the report puts many people off.
"While we recognise the financial pressures for drivers taking to the roads for the first time, it is also a criminal offence to drive without proper insurance cover," West said.
Those caught driving without insurance policies could be fines, receive up to 8 point on their licence and even have their vehicle seized, and if an uninsured driver were to cause a fatality they could face a two year prison sentence. Every year, around 230,000 people are convicted for driving without insurance in the UK alone.
Simon Douglas, director of AA Insurance, said: "I'm not surprised at these figures, even though it is shocking to see this statistic confirmed.
"Uninsured driving is not a victimless crime. Young drivers are 10 times more likely to be involved in a collision than more experienced drivers. If they have no insurance, any claim has to be met by the MIB, which in turn is funded by honest insurers."
If an insured driver is involved in an accident with an uninsured driver, the insured driver would have to make a claim against their own policy to repair damaged, resulting in future premiums to go up, while having to pay any excess and also losing any existing no claims bonus.
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