A quarter of parents of young drivers are fraudulently “fronting” car insurance policies

28th January 2015

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A quarter of parents of young drivers are fraudulently ‘fronting’ car insurance, by putting the policy in their own names in order for their for their children to save money.

The study by GoCompare.com found that a further 41% of parents said they would consider doing so to save cash.

The survey of 2000 UK parents of children aged 16 to 25, revealed that 25% of those whose children are driving have insured their child’s car in their own name in order to get cheaper car insurance premiums.

The practice, known in the industry as ‘fronting’ is fraudulent, invalidates a policy and could land in court those who knowingly try to fool insurers into charging lower premiums.

Of those surveyed, 49% think young driver insurance premiums are a ‘rip-off’, while 38% believe high premiums are pushing young motorists to drive uninsured. The cheapest car insurance premium for a typical driver aged 17 to 25 is £1480.37.

Matt Oliver, car insurance spokesperson for Gocompare.com, said: “Insurance premiums for new, inexperienced drivers can seem high and people are often surprised at how much they are compared to the value of the car they’re insuring. However, for Insurers the cost of replacing the car is small compared to the potential cost of other elements of claims involving young drivers such as personal injury claims for passengers and injuries and damage caused to third parties and their vehicles. 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.

“Although it’s understandable that a parent would want to help their child with the cost of getting on the road, insurance fraud is not the best option. Insurers look closely at their customers when they make a claim and there’s a good chance that any ‘fronting’ will be uncovered if parents do have to claim on the policy. If found out the policy may be invalid and the child may find themselves liable for all of the accident costs and the parent may find themselves in court and unable to get insurance in the future.”

GoCompare offers the following tips for young drivers to help cut their premiums:

Consider a higher excess – This may lower your premium but you will need to decide if paying a slightly lower premium is worth the risk of having to contribute more towards the cost of a claim if you have to make one.

Consider a ‘telematics’ policy – If you’re happy for your driving to be monitored a ‘telematics’ policy where a GPS-enabled transmitter is fitted to your car, or monitored through the use of a smart phone app, can give you a lower premium and if you prove to be a safe driver your premiums may fall more quickly than with a traditional policy.

Added extras – Consider whether you really need added extras such as a courtesy car, legal assistance, breakdown cover and key cover. Some policies include these types of cover as standard or as add-ons but they’re not free – the cost will be built into the premium so you may be able to save money by dropping them.

Adding a safe driver – Adding another named driver with a clean licence and several years claim free driving to young driver’s policy could reduce their premium. This is one way a parent can help their child to get lower premiums without breaking the law.

Sensible cars – Young drivers’ insurance premiums will be lower if they drive a standard car with a small engine (under 1000cc) in a low insurance group. It may not be their dream car but it is wise to drive something smaller and slower until they’ve built up some no claims bonus and have shown a safe driving record.

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