Direct Line is to retain no claims bonuses for policyholders hit by uninsured drivers.
The change in policy also applies to lifting any excesses that may be payable.
A spokeswoman for Direct Line said: "Direct Line is leading the industry by protecting policyholders who fall victim to an accident with an uninsured driver.
"Direct Line hopes that this initiative will be the first
of many by insurers, the government and the police to help protect the general public from the menace of uninsured drivers."
The initiative comes just weeks before the government announces the results of the Greenaway report in to uninsured driving, expected in September.
Claims arising from uninsured driving top 50,000 per year
and cost the industry £400 million, according to industry estimates.
