Tuesday 16th August 2011
Be Wiser Insurance

Drivers in the UK have been warned of the dangers of fronting by a leading price comparison service. The practice involves parents insuring their child's car in their name in order to keep prices down - something around two-thirds of mums and dads would consider, according to the company.

Technically, the act is fraudulent and can result in severe consequences for all parties, it added. 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 this fraud is exposed, insurers have the right to cancel the policy or charge the correct premium as a lump sum. In more serious cases the insurance company may not pay out in the event of an accident and they may even decide to prosecute with a possible jail term for the offender. Or the cost of third party claims may be recovered from the parent.

According to the managing director of the company, this behaviour is no surprise in the face of rising policy prices, but it is still a bad move if companies catch them out.

"Drivers who have had a policy cancelled will have to declare this on any future insurance applications and will find it harder to buy," she said.

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