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Last updated: 17/09/2021 | Estimated Reading Time: 5 minutes
Never heard of car insurance fronting? Then listen up to avoid facing any nasty legal consequences.
If you, a relative or a friend are looking for the best car insurance deals and don’t fancy the high premiums you’re being quoted, you might inadvertently consider fronting. But what is it?
Fronting is a type of insurance fraud, and many people may not be aware they’re committing a fraud when they front.
The primary perpetrators of fronting? It may surprise you…parents.
When you compare car insurance deals, you’ll be asked to provide certain information to insurance companies.
And, if you’ve been searching for a cheap insurance quote for a while (we feel you) then it’s likely you’ve become familiar with the following terms: policyholder, main driver and named driver.
These terms are also closely linked with fronting.
So, let’s iron out what these terms actually mean.
The policyholder takes out the insurance policy and will be the main driver of the vehicle: this means being the predominant and most frequent user.
However, a policyholder can also add an individual as a named driver to their policy – these are people who can drive the vehicle from time to time under your policy.
Person A – let’s say a seventeen-year-old – is a high-risk driver because they’ve only just passed their driving test.
They look to take out their own car insurance policy and see that the cost is more than their driving lessons, second-hand car and yearly wages combined. Feeling restricted and helpless, they need support.
So, Person B – let’s call them Mum, or Dad – takes out a car insurance policy in their own name, stating themselves as the main driver of the vehicle. Mum or Dad then adds their child onto their policy as a named driver, suggesting that they will only have occasional use of the car.
However, Person A still intends to be the predominant driver, has sole use of the car and begins enjoying their new-found freedom under the now much-cheaper car insurance policy.
Therefore, Person B fronts Person A’s car insurance policy.
This is the most common occurrence of fronting but note that it isn’t always a parent-child exchange.
Fronting can occur when any person names themselves as the main driver in order to reduce the premium for a high-risk driver, for example, if that person had a history of claims, fines or penalty points.
There are a few significant reasons why you should avoid fronting outlined below:
First, while simply adding a high-risk person as a named driver may cut the cost of the premium for them now, long term it’s actually pretty unhelpful.
This is because the named driver can’t build up their own no claims; this makes it more difficult to save money on car insurance later on, even once they’ve ceased being a high-risk driver.
Secondly, your insurance can become invalidated if the information on the policy isn’t an accurate reflection of how the car is being used and by whom.
This, in turn, means risking having to pay out in the event of a claim.
Plus, and call us out for stating the obvious, but there’s a reason certain groups of people are classed as high-risk: statistically they are the ones most likely to claim.
It’s a risky game for those who participate.
Finally, as we mentioned previously, fronting is fraud.
Take our parent-child example: we know there’s no intent to commit an illegal act. Parents see the extortionate cost of car insurance for new drivers and just want to help their children out, much like they might with contributing to a house or rental deposit.
High premiums hit those who are already struggling, and it’s easy to see why fronting may seem like a cost-effective, logical solution.
You might be swayed to list yourself as just a named driver on the policy. But if the vehicle is yours for transport to work, yours for social work trips, and you’re livid if the main driver so much as even borrows your car for a trip (we’re protective, okay?!), then both you and the person fronting you could end up in court for misleading your insurance provider.
A criminal conviction is not worth the money saved.
It’s not all doom and gloom, and there are still some ways to lower your car insurance quote.
If a high-risk user takes out a policy as the main driver, adding a low-risk user as a named driver may actually help to reduce the cost overall. How?
Well, it tells insurance providers that instead of the high-risk driver being the sole user of the car – and therefore the likelihood of a claim being brought about rests only on them – the car’s usage is shared with another low-risk person, in turn reducing that risk.
Some people choose to add a second low-risk user as a named driver to their policy too, again bringing down the cost of their premium.
If you consider yourself to be a responsible driver and find being automatically grouped in with high-risk drivers unfair, then consider installing a black box in your car. This device monitors your driving collects data such as your speed, frequency of driving and certain habits.
Insurance companies can access this information and build a premium for you based on the data you’ve provided – a truly personal policy. This can considerably lower your premium if you drive responsibly but remember: it records everything.