Biba is calling on the government to imprison uninsured drivers or seize their vehicles if they do not pay a proposed £100 fixed penalty notice for keeping an uninsured car.

In response to legislation proposed by the Department for Transport (DfT), the broker group called for far stiffer penalties at magistrates' courts backed up by jail terms or seizure of vehicles for "serious offenders".

Biba's reply to the DfT proposal said that for there to be an effective deterrent, fines should be £5,000 and there should also be an option to impose a custodial sentence for serious offenders.

The DfT proposal for continuous enforcement from the record of uninsured drivers put forward an initial fixed penalty notice of £100 for keeping a vehicle without insurance backed up a £1000 fine at court for those who fail to pay the fine.

The ABI said it agreed with the proposals and had undertaken research which showed the new offence could produce extra insurance revenues of £100m - about 20% of the estimated £500m bill for uninsured driving.