An MP is calling for an investigation into fears young drivers are taking out insurance policies and cancelling after the first month once they have received their certificates.
Carlisle MP Eric Martlew is writing to Transport Minister Stephen Ladyman and to the ABI after he learned of the allegations.
He contacted several brokers who confirmed some policies taken out by direct debit over the year were being cancelled after just one month.
He said: “I’ve trawled brokers and it appears some young drivers, obviously not all, are taking out policies by direct debit and paying over 12 months, but are cancelling after the first month. They have the certificate so the car can be taxed and have an MOT.
“The government must look into this. There will be many people driving around who are getting away with it.”
Martlew suggests young drivers should be forced to pay up front by taking out a small loan which would ensure they were covered for the whole year.
But he accepts that if rules on buying insurance are tightened too many drivers will drive illegally.
His calls for an investigation comes as parliamentary figures reveal the number of people found guilty by courts in England and Wales increased by 22% from 264,577 in 2000 to 322,814.
But the average fine handed to an uninsured driver has fallen by 16% from £203 in 2000 to £169 across England and Wales.
Courts are allowed to hand out fines of up to £5,000 to anyone found guilty of driving while uninsured and can also hand out up to eight penalty points. The Home Office said it was committed to dealing with the problem.