“Fronting” On Car Insurance Takes Heavy Toll On Parents

Although everyone has been bearing the brunt of rising car insurance costs, it turn out that some have to bear more than others, as a Telegraph recently pointed out.

A woman who was paying an annual car insurance premium of £743 a year got a nasty surprise when her premium increased to a whopping £7000 in the course of one year. Even worse, when she tried changing her policy for a cheaper one, her insurer flatly told her that it would mean another £1000 to do so.

This catastrophic increase has a ridiculous explanation: it seems that her insurance company was under the impression that the women was acting as a front for her 23-year old son, and the reason for the stratospheric rise in the policy premium was that it should have been his name on the policy as the main driver, not hers. The incident has evoked fear and alarm in the minds of other parents, who may now be the victims of similar price shoot ups.

Although the availability of car insurance comparison websites and governmental efforts to decrease insurance premiums for denizens seems to have made some inroads, policy holders still have ample cause for worry.

Since there are many parents who are policy holders for cars that are driven by their teenage children, the problem spreads far and wide. Typically, the parents add their son/daughter’s details as a “named driver” in a hope to keep the cost of insurance to a minimum. This is still legitimate, granted that the parent in question also shares the use of the car, if not the main driver. Acting as a front, or “fronting”, is an illegal practice where the parent insures the car but the sole driver is the offspring.

The insurers are reasonably miffed about this practice, deeming it as fraud, since they are setting prices on the basis of the parent’s details (age, profession, driving record etc.), whereas in actuality, the car is being driven by the considerably less experienced younger driver, who is more likely to be involved in an accident and make the offending claim.

However, the real problem that arises for both the parents and the insurance company is the matter of proof. Most insurers generally hike insurance premiums based on a ‘hunch’, that is, the suspected practice of fronting. However, parents can be the losing party to, since it is virtually impossible for them to prove otherwise, which as the Telegraph reader found out, can have disastrous consequences.

Young drivers generally have to bear with sky high insurance costs as a result of their general tendency to get involved in accidents, a fact that has statistical backing.

However, contradictory reports state that the rate of collisions caused by young drivers has fallen considerably, yet the price of car insurance premiums continues to escalate.

The Department for Transport recently published figures showing that the fatalities in accidents reported that involved young car drivers had actually taken a 23 percent fall in 2010 from the previous year.

A large number of insurance experts and scholars have gathered in Westminster in order to discuss the changes that can be introduced in policies so as to reduce the risks of the younger drivers.