Thousands of parents with good intentions are fraudulently pretending to be the main driver of a vehicle when in fact it is primarily used by their children, latest research reveals.
Up to one in 6 young people have admitted that in an effort to reduce their soaring insurance premiums they are driving fraudulently on their parent’s car insurance according to insurance website gocompare.com. However, such practices often come to the attention of the authorities should the driver have an accident at a university or other such place, causing the insurer to suspect ‘fronting’ and to launch an investigation into the claim.
The practice, known as ‘fronting’, happens where a lower risk and generally older driver insures a vehicle in their name as the main driver albeit it is the higher risk ‘second’ driver who will really be driving most of the time. It is a practice often used by well meaning parents trying to save money for their children to reduce the pressure on themselves who often help out with such large costs.
However, ‘fronting’ can have serious financial and legal consequences. If detected, insurers can refuse to pay out for any claims, or can settle a claim and then make attempts to recover the costs from the parent as policyholder. Even worse, should the insurer fail to pay out on a claim, the driver could then be considered to vet ‘uninsured’ and could face proceedings for driving without insurance. They will also face higher insurance costs in the future. Insurance industry experts say ‘fronting’ is fraudulent, invalidates a policy and could result in a court case.
Scott Kelly, head of car insurance at Gocompare.com, said:
“The costs of getting your first car on the road can seem sky high to a young driver and certainly the insurance premiums for new, inexperienced drivers can be substantial. However, we’d warn people against fronting in an attempt to reduce the cost of their cover.
“Fronting is fraud and if you do have to make a claim on the policy, the chances are you’ll be found out and you may end up in a lot of trouble.
“Not only will the policy be invalid but you may find yourself open to prosecution, liable for accident costs and find it hard to get insurance in the future.
“Worse still are those risking a criminal record, penalty points, disqualification, a large fine and the possibility of having their car turned into scrap metal by ignoring car insurance altogether.”
A further 3.5 per cent of young drivers are driving without any cover at all. Driving a vehicle on a road or in a public place without third party insurance is an offence. The consequences of driving without insurance include a fixed penalty of £300, six penalty points and the risk of having the car seized and destroyed. Should the case proceed to court, the driver could receive a fine of up to £5,000 and be disqualified from driving.
According to the AA, uninsured drivers cost the insurance industry around £380m a year and add around £33 to the cost of every motor insurance policy.
Mr Kelly added:
“Parents can help their children to become responsible drivers and lower their insurance costs by staying on the right side of the law.
“A final warning for those young drivers who borrow other people’s cars is that they must make sure the owner’s policy would extend cover to them if they had an accident whilst in charge of the vehicle.
“Incorrectly assuming you were covered will not be a sufficient excuse if you have an accident and it turns out you were actually driving without insurance.