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17% of parents are potentially committing fraud by 'fronting'

23 February 2016

Gocompare.com warns parents against 'fronting' car insurance as new research* reveals: 

  • 17% of parents have insured their child's car in their name to save money on insurance premiums;
  • 36% of parents would consider insuring their offspring's car in their name to get cheaper insurance. 

A new survey reveals that 17% of parents are, insuring their child's car in their name in order to reduce the cost of the policy.  The practice, known as 'fronting' is a common type of insurance fraud often unintentionally carried out by well-meaning parents.  Gocompare.com is warning parents that 'fronting' their children's insurance could leave them with a criminal record.

The research of 2,000 parents of children aged 16 to 25, commissioned by Gocompare.com, found that 17% admitted to insuring their child's car in their name specifically to save money on insurance premiums, while 36% of parents surveyed said they would consider doing so in the future.

Fronting occurs when parents insure their child's car in their own name adding the child (the real main driver) to the policy in an attempt to keep costs down. This seemingly innocent practice is in fact illegal and, the financial and legal consequences of being caught are serious for both the parent and child. 

Where this fraud is exposed, insurers have the right to cancel the policy - making it harder and more expensive to buy insurance in the future.  Insurers can also refuse to pay for any claims and recover the cost of third-party claims from the parent as the policyholder.  If the insurance policy is invalidated, any drivers covered by it would effectively be uninsured and could be fined hundreds of pounds and receive six penalty points on their licence.  If a newly qualified driver accumulates six or more penalty points within the first two years of passing their driving test (including any points acquired before passing their test) their licence will be revoked automatically. To regain their driving licence they must reapply for a provisional licence and may drive only as a learner until they pass a further driving test.

Matt Oliver Gocompare.com's car insurance spokesman commented, "Car insurance for young drivers can be expensive and it's only natural that parents want to help their children get on the road.  But, lying to their car insurer is absolutely the wrong way to go about it and could have serious consequences for both the parent and child.

"Parents shouldn't be tempted to hide a young motorist as a named driver on a policy. When applying for car insurance 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 crucial factors.  Not telling the truth about who is the principal driver is technically fraud which may result in a policy being cancelled and any claims refused. 

"As well as being illegal, fronting is a false economy.  Insurers are wise to the practice and many price policies according to the age of the youngest named driver.  However, there are many legal ways for young drivers to find more affordable insurance including shopping around for the best value deal, considering a telematics based policy or opting for a higher policy excess.   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 tips to help young drivers find more affordable car insurance and keep their premiums low:

Consider a 'telematics' policy - If you're happy for your driving to be monitored a 'telematics' policy (where a GPS-enabled transmitter is fitted to your car or monitored through the use of a smart phone app) can be a more affordable option.  If you prove to be a safe driver your premiums may fall more quickly than with a traditional policy.

Remove added extras - Consider whether you need an insurance policy with added extras such as a courtesy car, legal assistance, breakdown and key cover.

Consider a higher excess - This may reduce your premium but you will need to decide if paying a slightly lower premium is worth the risk of having to contribute more towards the cost of a claim if you have to make one.

Adding a safe driver - Adding a named driver with a clean licence and several years claim-free driving to young driver's policy could reduce their premium.  This is one way a parent can legally help their child to get lower premiums.

Drive a sensible car - Generally, the lower the engine capacity, the lower the premium- ideally an engine size of less than 1000cc is best.  Avoid vehicles with any modifications from the standard manufacture. 

Gocompare.com has created a guide on car insurance for young drivers


Notes to editors:

*Between 18 and 25 January 2016 One Poll conducted an online survey among 2,000 randomly selected British adults with children aged between16-25.