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Talking on BBC Radio 4's Today programme, transport minister Jim Fitzpatrick said the DVLA would work with the Motor Insurance Bureau to track down drivers without insurance and send them a letter demanding an explanation.
If a driver cannot explain why they have no insurance, they will be issued a fixed-penalty fine of £100, rising to £1,000 and possible court action to seize their vehicle.
Car owners who have declared their vehicle as off the road will not be liable to pay the fine.
Mr Fitzpatrick also said reasonable excuses, such as the renewal fell on a date while the owners were away on holiday, would be accepted.
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