The cost of car insurance for young and inexperienced drivers is extremely high and in fact prohibitive for many young people this has led to increased fronting on young drivers car insurance but what is fronting on a car insurance policy and is it illegal?
What is car insurance fronting?
When a person applies for insurance for a car and they declare themselves as the owner or main driver of the vehicle when they are not. This is a practice that is used by parents in order that their son or daughter can obtain car insurance at a much lower cost than if the policy were to be in their own name.
Is fronting car insurance illegal?
Yes fronting car insurance is illegal, it is fraud. now you can dance around the facts here with expressions such as the vehicle belongs to the parent, we both drive the vehicle and the son or daughter’s use is only infrequent and occasional but if you state that the main driver of the vehicle is not the son or daughter and it is then this is an act of fraud. You are deliberately making an incorrect statement for you own financial advantage.
Fronting car insurance, nothing new under the sun.
It is true that the practice of fronting a car insurance policy for financial advantage is nothing new and in fact is probably considered as perfectly acceptable by a large percentage of the population but fronting has increased in recent years with the high levels of premiums for young drivers and the level of insurer awareness of the problem and investigation that is undertaken where fronting is suspected have increased at a higher rate still.
What are the disadvantages of fronting a car insurance policy?
Leaving aside the obvious factors of a young driver not necessarily earning their own no claims bonus, the reality of being caught fronting a policy is somewhat more frightening as it is almost certain to happen in the event of a claim.
In the circumstances that the insurer considers that fronting has taken place they can void your policy. This means cancelling the policy from the start or ab intio, this means that you have no insurance and have never had any.
- Any claims for own damage on a comprehensive or third party fire and theft policy will be refused.
- Under market agreement the insurance company will be responsible to deal with third party claims however they may well be in a position to sue you in order to recover the costs of such claims. This may not be an option if you have no money or assets, but is you have property or cash, you could be at risk.#
- The driver could be charged with driving without insurance and receive a fine and a 6 point endorsement on their licence, this constitutes a ban for new drivers.
What if the insurance company has not asked me who the main driver is?
The Financial Ombudsman Service FOS has looked into this matter on a number of occasions and is supportive of insurance companies generally in their decisions. They have been critical on occasion that certain providers do not take adequate steps to ensure that the facts regarding the main driver and the consequences of misrepresentation are clear. Insurers are increasingly clear in the questions they ask particularly following the Consumer Insurance (Disclosure and Representations) Act 2013 and whilst you may feel that you were not asked correctly for the information, it is an extremely high risk game to play.
I have a car insurance in place where I am shown as the main driver but actually I am not, what should I do?
Contact your insurance provider immediately and inform them of the facts, they may not be able to help you under your current policy and you may have to seek a more expensive alternative, but the current arrangements you have are not correct and you may not be insured.