Thousands of drivers are committing insurance fraud – and risking the validity of their car insurance – by claiming to be the main driver on their children’s policies.
It is not illegal to have a younger driver named on a policy – in fact, many new drivers find adding a partner or parent who is more experienced behind the wheel, or has built up no-claims bonus, can reduce their premiums.
However, it is vital that the main driver of the vehicle is the named driver on a car insurance policy – if they aren’t, then you could be committing a type of insurance fraud known as fronting.
What is fronting?
Fronting normally involves parents insuring a car and declaring themselves as the main driver in order to reduce the insurance premiums, when in fact their son or daughter will be the main user.
One-in-five drivers admits to committing this kind of motor insurance fraud, according to research from the Motor Insurers' Bureau (MIB) and Aviva.
Meanwhile, passing the younger driver off as a ‘spouse’ or ‘partner’ can reduce insurance costs even further – leading to the number of drivers committing this type of fraud doubling in the past two years.
More than 35% of those questioned by MIB and Aviva believe fronting is a legal loophole and one in 10 believe this is a legitimate way to reduce insurance premiums.
What are insurers doing about the problem?
With fronting costing insurers an estimated £1.9 billion a year, it’s little wonder that firms are cracking down.
Swiftcover.com warns that insurers are increasingly sharing information between themselves and other agencies to spot the tell-tale signs of attempted fraud.
For example, older policyholders who add a spouse or partner who is much younger are likely to have their insurance reviewed and face additional checks.
And people insuring multiple cars – usually with different insurers – might also be asked to prove that they are indeed the main driver for all the vehicles insured in their name.
Robin Reames, claims director for swiftcover.com, says: “Trying to buck the system by fronting is not only illegal, it actually ends up costing law-abiding motorists if they are involved in an accident with a fronted driver who is actually an uninsured driver.”
What are the consequences of fronting?
Drivers found to be ‘fronting’ a policy will see their policies deemed invalid, and any outstanding claims will probably be rejected. They might also face legal action from third parties involved in an accident.
Anybody caught fronting potentially faces paying much higher insurance premiums in the future, and may even be turned down by many insurers.
Ashton West, chief executive of MIB, explains: "In the event that the driver of a fronted policy is involved in an accident, both the policyholder and the driver could be open to additional costs, penalties, fines and - potentially - prosecution. It simply isn't worth the risk.”
Fronting can also be detrimental to younger drivers, as it means they are unable to build up a no-claims bonus.
Nigel Bartram, motoring strategist at Aviva, says: "When parents are fronting up a young driver's policy it means the young driver is not fully declared and will not be able to accrue any no-claims bonus of their own.”
He adds that fronting is not a victimless crime, as the expense of fraud pushes up premiums for everyone.
“It is important that insurers are covering the appropriate risk with the correct premium; otherwise this premium will have to be borne by other, honest customers," Bartram warns.