Motorists who flout the law and use their mobile phone handsets while driving risk a double financial penalty, insurers have warned.

The Association of British Insurers (ABI) said that as well as the £60 fine, any damage a driver does to their own car while talking on a mobile handset might not be covered.

Insurers could, the ABI warned, refuse to pay out, leaving the driver with additional costs to bear.

A spokesperson for the trade association said: "[using a mobile phone] could impact on claims made under your own policy in respect of accident repair to your own vehicle, as you are expected to take reasonable care.

"Using a phone while driving is not only illegal, but studies have shown does significantly distract you."

The issue of driving while using a mobile phone was highlighted last week when the Home Office minister Liam Byrne admitted the offence.

The government has made it clear that it aims to stamp out this practice and has doubled the fine since the law was first introduced.

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