The Motors Insurers' Bureau (MIB) has successfully lobbied the government to introduce a law which will require all motor vehicles to have insurance.

Off the road vehicles are currently exempt from insurance, but this will change when the Road Safety Bill is passed creating a new offence of "keeping a vehicle without insurance".

MIB group chief executive Ashton West said: "What is important is the requirement to systematically enforce the obligation to insure. This cannot be done with the law as it currently stands as you only require insurance whilst using a vehicle. What the new law will mean is that if you have a registered vehicle then it has to be insured."

West anticipates this will boost the MIB mission to wipe out insurance evasion. "It is similar to the introduction of the continuous requirement for road tax," said West. "If the tax isn't renewed the current registered keeper will receive a fixed penalty fine."

The development comes after the MIB started to send details of suspected uninsured vehicles from its Motor Insurance Database (MID) to police forces across the country, resulting in a ten-fold increase in arrests by police using the data.

"The question of whether you have insurance at all is ascertained from the MIB database," said West.

The MIB, along with the ABI, has also successfully lobbied the government to increase the fixed penalties for uninsured driving.

The fine has grown from £150 to a minimum £200, but also includes added extras such as a recovery cost fee of £100 and a storage cost of around £150 totalling around £500, more in line with an average motor policy.

"Previously the fines were so low there was no incentive for those evading insurance to get an insurance policy. The increase in fines has made some people think twice about not getting insurance," said West.

The MIB is looking to dramatically cut the estimated £500m a year uninsured driving costs, which equates to an extra £30 to each motoring policy.

So far the MIB has seen the figure reduced by £30,000 in the last year, which, West admits is still small.

"It is small in percentages terms, but we are going in the right direction and with the new law and a greater use of the database we are looking to cut further into the overall figure."