The body estimates that an incredible 250,000 people aged between 17 and 20 are getting behind the wheel without cover - and that one in ten young drivers don't know that insurance is a legal requirement.
High premiums are being blamed for the fact that so many are driving with no insurance, but as a result all law-abiding motorists are being charged extra.
Ashton West, chief executive of MIB, admitted the high cost of cover could be putting off many young drivers but warned that this cannot be an excuse for breaking the law:
"While we recognise the financial pressures for drivers taking to the roads for the first time, it is also a criminal offence to drive without proper insurance cover.
"More than £500 million in funds from law-abiding motorists are used every year to compensate people for property damage and personal injury as a result of uninsured drivers."
Unsurprised
Insurance providers say the news is not unexpected. Simon Douglas, director of AA Insurance, said: "I'm not surprised at these figures even though it is shocking to see this statistic confirmed.
"The average number of uninsured drivers is 1 in 20, which costs the insurance industry £500 million every year - the equivalent of £30 on every car insurance policy bought by honest motorists."
He added: "Uninsured driving is not a victimless crime... If they have no insurance, any claim has to be met by the MIB." This means the cost is then passed on to honest drivers.
Driven by recession
Earlier this month, moneysupermarket.com carried out research that revealed there has been a 33% increase in uninsured driving compared to 2008, suggesting the recession is fuelling the problem.
Steve Sweeney, head of motor insurance at moneysupermarket.com, said: "The onset of recession may mean more motorists are unable to afford the cost of their insurance but, if hit by an uninsured vehicle, only motorists with a fully comprehensive policy will be covered by their insurer to pay for the car to be repaired, and even then they may face losing their no claims discount."
He urged drivers to buy cover, even if they can only afford third party protection - the legal minimum.
"The cost of running, and insuring, a car can be expensive - especially for younger drivers - however, it is quicker and easier than ever to find a cheap motor insurance quote."
Keeping costs down
Motorists using the moneysupermarket.com car insurance comparison tool will save an average of £157 on their cover, helping make cover more affordable.
But there are many ways for young drivers to make themselves safer on the road, which helps them find cheaper policies, whether it's taking the Pass Plus course, buying a vehicle with a smaller engine or limiting their annual mileage.
For more on this watch our video 'Insurance tips for young drivers' and read our article 'How young drivers can put brakes on insurance costs'.
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