One in five parents may be engaging in insurance fraud in an effort to reduce the cost of a car for their kids as low as possible.
One in five parents who attempt to obtain cheap insurance for new drivers run the danger of being prosecuted for car insurance fronting.
According to a recent survey on driver behaviour, up to 20% of parents admit "fronting" for their children on their insurance in an effort to save money as drivers continue to struggle with tight budgets.
Fronting occurs when a younger or higher-risk person is actually the primary user of the vehicle but an older or more experienced person is listed as the primary driver on the insurance policy. Although it is illegal and can result in major issues for drivers caught doing it, the practise frequently contributes to lower insurance premiums.
To keep the price of a car for their children as cheap as possible, one in five parents may commit insurance fraud.
In an effort to save money as drivers continue to battle with tight budgets, up to 20% of parents admit "fronting" for their kids on their insurance, according to a new study on driver behaviour.
Although fronting may seem like a simple way to save money, it can actually wind up costing families far more. Insurance fraud is prohibited, and if you are found guilty of fronting, you risk receiving a hefty fine, six licence points, and a criminal record.
Fronting could also result in your insurance company cancelling your coverage and refusing to pay any claims, leaving you responsible for any damage or injury charges. Furthermore, getting insurance in the future will be more expensive and challenging if you are found to have engaged in insurance fraud.
It's not surprising at all that families would want to save money wherever they can, especially those who are facing big, new expenses like buying someone their first car, according to Ryan Fulthorpe, a motoring expert at GoCompare. "We're seeing a period of huge financial strain on families at the moment," he added.
Period of huge financial strain
"Unfortunately, parents frequently are unaware that it is illegal to insure a child's vehicle in your name even if you won't be the primary driver. Although it may seem like a cost-saving measure, fronting is considered insurance fraud, so you risk having your policy cancelled at best and receiving a sizable fine and a criminal record at worst.
Decreasing costs
According to the Association of British Insurers (ABI), average insurance rates have decreased recently, although young drivers continue to pay significantly higher premiums than senior drivers. The typical policy for a driver aged 17 to 19 is £1,161, which is nearly three times the national average, according to the most recent data from quotes on GoCompare.
A third (30%) of parents in London admitted to placing their names on their child's insurance policy, probably as a result of the relatively high cost of auto insurance in the city. The study also discovered regional variances in views toward fronting.
The numbers appear to have fallen since last year, which is good news." Mr. Fulthorpe continued, "when nearly one-fourth (24%) admitted to fronting, whether accidentally or not. These statistics show that we are not moving more and more toward hazardous choices in order to save money, which is positive given the financial strains that many people are currently experiencing.
