Parents break the law to get kids motoring
Date: 17/09/2007 08:00:00
New research from Gocompare.com, the online insurance price comparison service reveals
that to save money, two thirds (66.4%) of parents would consider breaking the law by
insuring their child's car in their name.
The practice, known in the insurance industry as 'fronting', is technically fraud
and the consequences if caught are serious for both parent and offspring.
Parents insure a car in their own name adding their child, the real main driver, to the
policy as a way of keeping costs down, and insurers are no-longer turning a blind eye to
the practice. Some insurers have even changed their underwriting criteria to prevent this
by charging for the highest risk driver, even when this isn't the main driver.
Where 'fronting' is exposed, insurers have the right to cancel the policy or charge
the correct premium as a lump sum. Drivers who have had a policy cancelled will have to
declare this on any future applications and will find it harder and more costly to buy
insurance because the majority of insurers would refuse them cover.
Insurers can also refuse to pay-out for any claims or can settle a third party claim and
recover the cost from the parent as the policyholder. If the insurer declines a claim,
the young driver could be treated as uninsured and could be fined hundreds of pounds and
receive six penalty points (an automatic ban for new drivers). They will also face higher
insurance costs in the future.
Hayley Parsons, Managing Director of Gocompare,com commented, “The research is very worrying.
With car insurance premiums reaching their highest ever levels*, it's only natural
that parents would want to help their children get on the road. But, I was surprised that so
many were prepared to lie to their insurance company to do so.”
“Parents shouldn't be tempted to hide a young motorist as a named driver on a policy.
An insurance policy is a contract based on trust and you are obliged to tell the insurer
of anything that could influence their decision in offering cover - the age and experience
of a driver are both important factors. Not telling the truth about who is the principal
driver is a fundamental breach of trust and is technically fraud which may result in a
policy being cancelled and any claim refused.”
“As well as being illegal, fronting is a false economy. Insurers are wise to the practice
and many now set the price according to the age of the youngest driver on the policy. In
the long run it is better for young drivers to hold insurance in their own name to build-up
valuable no claims discount.”
Gocompare.com has produced the following checklist to help younger drivers keep their
premiums low:
-
Generally, the lower the engine capacity, the lower the premium – ideally an engine size of less
than 1200cc is best. Also, avoid models with letters after it, for example 'i',
'sxi', 'gti' or 'xl'.
-
Avoid vehicles with any modifications from the standard manufacture.
-
Consider taking the Pass Plus training course which is designed to give new, young drivers
additional practical driving experience. Once completed, the course normally entitles drivers
to reduced premiums. Visit www.passplus.org.uk
for more information.
-
Shop around for your insurance – don't settle for the first quote you are given.
-
The cost of taxing a vehicle can also vary, depending on the CO2 emissions that it produces.
The lower the emissions, the cheaper the cost of vehicle tax. The UK fuel economy label will help
you choose a vehicle which is fuel efficient and produces lower carbon emissions. These are
ranked from Band A to Band G**. More information can be found at:
http://www.direct.gov.uk/en/Motoring/OwningAVehicle/HowToTaxYourVehicle/DG_10012524
or
http://www.dft.gov.uk/ActOnCO2/index.php?q=best_on_co2_rankings.
Ends
Further information:
Lynsey Walden at Gocompare.com on 01633 654 055
Gordon or Liz at Maw Communications on 01603 505 845
Notes to editors:
The research for Gocompare.com was carried out online by Tickbox.net August 2007 amongst a
nationally representative sample of 1,733 UK adults.
* The AA British Insurance Premium Index reported on 3rd July 2007 that motor insurance
premiums had reached record levels.
** Band A cars do not cost anything to tax as they produce under 100g/km in carbon
emissions. An example of a Band A car is the Polo Blue Motion 1.4 Tdi 80PS. Cars in Band B will
cost £35 for the year, and this includes Toyota Aygo (1.0 VVT-i) or a Peugeot 107 1.0 (65 bhp).
In contrast, a Peugeot 207 1.6 THP will set you back £165 for the year.
Gocompare.com launched in November 06, the brainchild of Hayley Parsons the co-founder of
Confused.com. The first of the so-called 'third generation' comparison sites, cutting edge
technology makes the customer experience slick, quick and easy. Unlike some other aggregator
services Gocompare.com always provides a guaranteed quote, rather than just an estimate.
Gocompare.com comparisons are based on comparing the range of cover (using a five star rating process)
and not just cost.
Gocompare.com is authorised and regulated by the Financial Services Authority.