Some insurance companies have called for a review of the penalties faced by drivers who evade car insurance, insisting that current ones do not deter would-be law breakers.

On average the fine imposed on drivers who drive without insurance cover has decreased from £224 to £185 over the last 10 years, lamented an insurance firm.

This is happening amidst increasing motoring offences, including insurance evasion.

Only about 260,000 of the 1.5 million uninsured drivers across the UK are prosecuted each year, it claimed, adding that law abiding motorists end up having the cost of uninsured ones passed on to them in the form rising insurance premiums.

Experts have estimated that the country is losing up to £500 million each year because of uninsured drivers and warned that unless stiffer laws are introduced to discourage the act the number of perpetrators will keep rising.

A recent report blamed the rise in car insurance evasion on the credit crunch, saying some motorists consider it a means of saving cost.