Learn about car insurance fronting and how it could land you in trouble with the law
A worrying and illegal trend has emerged called ‘car Insurance fronting’ in an effort to reduce costs for young drivers. Read on to learn more about car insurance fronting and its repercussions to the policyholder and the named drivers.
Car insurance costs for young drivers
Learning to drive is considered a rite of passage for many young people, but most struggle with the high cost of getting on the road. Budding drivers need to budget for their provisional licence, professional lessons, and the cost of the driving test. All of this can add up to £1,311 or more (depending on the amount of lessons and tests taken before passing), and that’s before the cost of buying a first car and getting insured to drive it.
Many young drivers try to keep the cost down by buying a cheap second hand car, but it’s an unfortunate fact that the first year’s car insurance may cost more than the car itself.
Car insurance for new drivers can be very expensive, especially for those under the age of 25. New and young drivers are statistically more likely to be involved in an accident, so insurers raise their premiums based on that risk. Car insurance costs usually fall over time based on the driver’s age, experience, and any no claims bonus they earn.
What is insurance fronting?
Just as some parents want to help to get their teenagers on the road by buying their first car or paying for lessons, some may wish to help out with the insurance.
Unfortunately, some choose to do this by ‘fronting’ their child’s car insurance policy. This most commonly occurs when a parent takes out a car insurance policy and declares themselves as the main driver, adding the young driver as a named driver despite the fact that the child will be driving the car more than the parent.
It doesn’t matter whether the parent or the child is paying for the insurance – the applicant (in this case the parent) has committed fraud by lying on the application.
While car insurance fronting is most common among parents and their children, it can also occur when any car insurance application is taken out in one driver’s name on behalf of another in order to cut the cost – whether that’s because the named driver is inexperienced or has existing claims or convictions that could push their premiums up if they take out a policy in their own name.
Essentially, fronting is defined as providing false information to try to get a cheaper premium on behalf of an at-risk driver.
Surveys have suggested that up to a quarter of people in the UK have fronted a car insurance policy. A 2014 report by Privilege Insurance revealed that more than two million drivers in the UK are fronting by allowing a named driver to drive the car more than they do, and many ‘main drivers’ never actually get behind the wheel of the car they’re insured to drive.
Who is the main driver?
To avoid accusations of fronting, it’s important to identify the main driver correctly in your car insurance application.
Put simply, the person who uses the car most regularly should be declared as the main driver — it doesn’t matter whether the parent bought the car or is named on the car’s registration document.
The dangers of car insurance fronting
Many people are tempted to cut the cost of insurance by exploiting what they see as a loophole in the car insurance system. The fact is, fronting is not a loophole, it’s insurance fraud.
Most insurers have methods in place to detect fronting, and as it’s a criminal offence, the penalties can be severe.
Firstly, your policy will be cancelled by your insurer if you’re caught fronting. If this happens you will find it much more difficult to get affordable car insurance in the future.
If fronting is detected when you’re making a claim, your claim will be rejected and you will have to pay any costs yourself.
Fronting cases often go to court, resulting in a fine of up to £5,000 along with six penalty points — enough for an instant driving ban for those who have held their licence for less than two years.
Some people willingly break the law by fronting a car insurance policy for their child, while others using price comparison websites simply notice that their quotes are significantly lower by submitting a parent’s name as the main driver.
The key thing to remember about car insurance fronting is that ignorance is not a defence — you will still be punished whether or not you knew you were committing a crime.
Aside from the legal ramifications, there are other downsides to fronting a car insurance policy. Most insurers do not allow named drivers to build up their own no claims discount, meaning the young driver will struggle to get a cheap quote when they eventually take out their own policy.
There is also the risk of losing the main driver’s no claims bonus in the case of an accident, even if the older driver has never driven the car.
Cut insurance costs without fronting
The good news is that there are ways to cut the cost of young drivers’ car insurance without resorting to fronting.
Parents or more experienced drivers can still add themselves to a young driver’s car insurance policy as a named driver, providing they will make occasional use of the car. This is likely to reduce the cost of the young driver’s insurance while allowing them to build their own no claims discount.
To get the cheapest car insurance quotes, it’s always best to start by comparing quotes from several providers.