Owners of uninsured cars are facing fines of up to £1,000 and having their car seized and destroyed.
Under new central government-devised powers, it will be an offence to keep an uninsured vehicle, rather than just to drive when uninsured.
Currently every responsible motorist pays an average £30 each year within their premiums to cover crashes involving uninsured and untraced drivers.
It is also estimated that uninsured and untraced drivers kill 160 people and injure 23,000 every year.
Motor Insurers’ Bureau (MIB) will compare its database with that of the Driver and Vehicle Licensing Agency (DVLA) to root out registered but uninsured vehicles.
Under the new system motorists will receive a letter if their vehicle appears uninsured, warning them that they will be fined unless they take action.
If the keeper fails to insure the vehicle they will get a £100 fine.
If the vehicle remains uninsured, the owner will face court prosecution and fines up to £1,000, and the car could be seized and destroyed.
Road Safety Minster Mike Penning said: “More than 400 uninsured vehicles are already being seized by the police every day but it is simply not possible to catch every uninsured driver in this way.
“Uninsured drivers push up premiums for other motorists and often drive with no regard for other road users, so it is vital that we do everything we can to keep them off the roads,” Penning added.
John Siddle of the Lincolnshire Road Safety Partnership welcomed the government’s action to reduce the number of uninsured drivers on the roads:
“The honest law abiding motorist has been paying for those who flout the law for to long and the road safety ministers action will address the balance.
“People using SORN will be unaffected, but those who skip months of insurance on purpose will be found out.
“This initiative will hopefully deal with those people who simply choose not to insure their vehicles and manage to evade road side checks where ANPR cameras will pick them up.”
— Later update: Superintendent Keith Owen of Lincolnshire Police said other agencies can play an important role in targeting offenders.
“We welcome the powers which will help to strengthen the effort to prevent the harm that uninsured vehicles and their drivers cause on Lincolnshire’s roads.”
Latest estimates show that around 4% (around 1.4 million) of British motorists drive uninsured.
The penalty for driving without insurance is a maximum fine of £5,000 and six to eight penalty points.
Around 242,000 offenders are convicted for uninsured driving every year.