The new database of insured drivers handled 2,000 police inquiries in its first hour of use, said Motor Insurers' Information Centre (MIIC) project manager Donald Martin.

The database, which launched to police on September 5, allows officers to check instantly whether a driver is insured.

The move is an attempt to reduce the high number of uninsured UK drivers who, according to the MIIC, cost the motor insurance industry more than £400m per year.

Martin said: “We reckon there are approximately one million uninsured drivers in the UK. This equates to one in every 20 cars.”

He added: “At the moment, the victim is the honest motorist who is subsidising the costs of uninsured drivers.”

The police estimates it conducts 25 million vehicle checks each year. With the new system, whenever they carry out a check, they can access the Motor Insurance Database (MID) from the roadside, either by calling through to a police station or by using a handheld computer terminal.

The MID has been developed by the motor insurance industry to capture the insurance details of every driver in one central database, through unified IT systems. Apart from allowing the police to target offenders more effectively, the system is expected to be an aid to insured drivers who are not carrying their documentation. They will no longer have to report to a police station within seven days.

The MIIC said the new database should act as a deterrent to uninsured drivers as they are likely to be caught more often.

Currently, drivers have little incentive to be insured because the average annual motor insurance premium is £350, while the average police fine for an uninsured driver is only £200, said Martin.

Meanwhile, Stephen Bales, associate director of EasyPay, the insurance intermediary that specialises in the taxi and private hire market, said: “As the status and costs of claims are updated within every client's individual file on a weekly basis, it is easy for accurate premiums to be set and for the relevant underwriting criteria to be automatically implemented.”

EasyPay said it had already developed an initial model for a central motor claims database.