Car Insurance Fraud: Why ‘Fronting’ Could Have Serious Implications For You and Your Child
Car Insurance Fraud: Why ‘Fronting’ Could Have Serious Implications For You and Your Child
For younger drivers aged between 17 and 25, car insurance premiums can exceed more than double the national average. With insurance costs running between £1000-1500, the annual premium could even exceed the value of the car itself. The high premiums represent the risks associated with younger and less experienced drivers. These risks include:
- damage to the car and potentially other property
- personal injury claims for themselves and the passengers
- personal injury claims for 3rd parties and their passengers
- damage to the other driver’s car
Matt Oliver, spokesman for gocompare.com commented: “Unfortunately drivers aged 17 to 20 are twice as likely to make an insurance claim as other drivers and their claims’ costs will be three times higher”.
The high car insurance premiums are driving parents to add their children to their policies – and fraudulently declare themselves to be the main driver, with their child as the second driver, even though the younger and higher risk driver is actually the main driver. In the insurance industry this practice is known as ‘fronting’.
For expert legal advice on driving and other road traffic offences please contact our dedicated solicitors on 01895 207928 for immediate help or our 24-hour line on 0330 999 4999. Alternatively, email us at roadtraffic@ibblaw.co.uk or complete our online form.
Parents trying to help their children financially
Fronting often occurs when a child is away at university, so that students, already burdened by debt, can reduce their outgoings.
In a survey commissioned by gocompare.com in October 2014, 2000 parents of children aged between 16-25, were randomly questioned about their car insurance policies. The survey revealed a surprising level of ‘fronting’ or the desire to do so, despite the fact that the practice is fraudulent and illegal.
According to the results:
- 41% of parents said that they would consider it in order to reduce premiums
- 25% of parents are insuring their child’s car in their name
- 38% of parents believe that expensive premiums are encouraging drivers to drive uninsured.
The consequences of fronting and the implications for you and your child
An insurance company could potentially uncover details of ‘fronting’ when investigating a claim.
Fronting is considered as an attempt to defraud and is based on the premise that incorrect information was deliberately noted on an insurance policy.
The consequences for a parent could include:
- prosecution for fraud and a criminal record or prosecution for allowing a vehicle to be used uninsured
- a fine
- 6-8 penalty points or a driving disqualification
- the risk of having the car destroyed
- invalidation of the policy and any claims i.e. the provider could refuse to settle a claim
- the insurance provider would be legally liable to cover third party claims but could pursue you to recover the costs
- significantly higher premiums in the future
- implications of a criminal record – including reputational damage and higher costs for other financial products
The consequences for the younger driver include:
The insurer could cancel the policy, leaving the driver without any insurance cover. They would then be driving ‘uninsured’ and therefore potentially face:
- prosecution for fraud and a criminal record or prosecution for using an uninsured vehicle
- a fine
- 6-8 penalty points or a driving disqualification
- significantly higher premiums in the future
- implications of a criminal record – including higher costs for other financial products
New drivers, i.e. those who have passed their test and have been driving for less than two years, will have their licence revoked if they have acquired 6 points. This would require them to re-take their driving tests.
Fronting is insurance fraud and a criminal offence; the consequences of committing this offence could last for years.
Other ways to reduce a young driver’s car insurance premiums
- Parents could consider adding themselves as additional drivers on their child’s policy. The fact that a more experienced driver is using the car (at least some of the time) could reduce the premiums.
- Consider GPS or ‘telematics’ insurance. This involves fitting a GPS tracker to a vehicle to allow an insurance company to track driving patterns and location.
- Reduce an insurance company’s financial liability through: adding an excess or increasing the excess level; dropping ‘add-ons’ such as a courtesy car, legal advice line, break down cover, key cover.
- Buy your child a low-risk car: Purchasing a car with a small engine capacity (usually under 1000cc) could reduce premiums.
- Safety and car use: Other ways to reduce costs include restricting mileage, fitting security features and parking off-street.
- Consider additional driving qualifications for your child: Advanced driving programs such as ‘pass plus’ could reduce premiums with a number of providers.
Expert legal advice and representation for all road traffic offences
IBB’s dedicated road and driving offences solicitors are experts in providing advice and representation. If you or a family member has been charged with a road traffic offence, we can help. Call us today on 01895 207928 for immediate help or our 24-hour line on 0330 999 4999. Alternatively, email us at roadtraffic@ibblaw.co.uk or complete our online form.
