Risks of Car Insurance Fronting

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John Duckett
John Duckett
Last Updated: 15 Sep 2020
(Rated from 342 reviews)

Have you ever heard of car insurance fronting? If not, then you’ve probably listened to your friend or relative talking about how their insurer placed very high premiums on their policy, and now they’re looking to figure out a way to avoid these harsh costs. Well, one of the methods most car owners avoid high insurance premium quotes today is by inadvertently considering fronting.

So, what is car insurance fronting1, you ask? Well, it’s a type insurance fraud and what it makes it high-risk is that you might not know you’re committing fraud when you front and the worst part is, the primary perpetrators of fronting insurance are usually…parents.

With that said, here are some of the risks of car insurance fronting.

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The Dangers of Car Insurance Fronting

When you consider the high costs that come with owning a vehicle, most people try to pinch every cent they spend on it and can even start looking for unconventional ways to save a few bucks on their car insurance. While many auto insurance companies today allow discount on their premiums, not every driver play fair.

 One of the ways motorist can break the rules to their advantage is by considering fronting insurance. The practice describes mostly newer and younger drivers who list an experienced driver, mostly a parent, as the main driver on their auto insurance policy2. For instance, an 18-year-old or 23 year old who just got their driver’s license could start with higher insurance premiums3 on their van insurance for young drivers, due to their gender, age and lack of driving experience.

So, to reduce the premiums, and rather than having their own any driver car insurance policy, the young drivers will insure the vehicle in their parent’s name although they’ll be behind the wheel most of the time.

Car Keys

Consequences of Car Insurance Fronting

According to research, almost 30% of parents today, with the hard financial times and to shield their kids from the harsh economic realities are opting for the fronted insurance policy. A further 40% admitted that they’d consider doing it to help save their kids’ cash4.

You might think that nothing may go wrong when you decide to front your insurance, but the fact is, you could end up picking up a criminal record just because you opted to reduce your insurance premiums.

First of all, your insurance company can decide to hand you over to the authorities for prosecution since fronting is car insurance fraud5. Secondly, the insurance policy might become invalid, and your accident claim might be rejected leaving you with substantial out of pocket expenses to cater to the damages to your vehicle and that of any other drivers involved.

You might not feel the pinch of insurance fronting right away, but with years to come, it’ll reflect on your record, and other car insurance policies might not want to cover you or will offer you a plan at a high premium.

How to Avoid Car Insurance Fronting 

When you decide to take out a car insurance policy, whether it’s a comprehensive policy6 or liability insurance, your agreement with the insurer will include a line that stipulates that you can’t misrepresent the details the driver listed on the policy. It typically means that you have to be honest from the get-go about who’ll be predominantly driving the vehicle.

Figuring out who’ll be the primary driver of a car isn’t always straightforward though, especially when the vehicle is considered a family car. The quickest way to figure this out is by asking who’ll be responsible for the maintenance and servicing of the automobile. If one person drives the ride often than other family members over 12 months, they’re then listed as the main driver.

Even though car insurance fronting is illegal, listing any driver to your policy isn’t. Some insurers allow regular drivers to include their kin individually, who’ll become entitled to drive the ride with the same insurance protection as the main driver. Depending on your insurance firm, the premium or excess can increase with each additional member included.

Making Decisions

 How to Effectively Lower Insurance Costs for Young Drivers

It’s not all doom and gloom when it comes to car insurance policies, and there are ways you can implement to help reduce your car insurance quotes as a young driver.

A parent or a more experienced driver can add themselves on to your young driver’s auto insurance policy as a named driver, as long as they’ll make occasional use of the vehicle. It will, depending on the insurance firm, lower the costs of your insurance while also allowing you to build your own ‘no claims discount’.

You might also want to consider a range of quotes before taking a policy. Weighing insurance quotes can save you hundreds by choosing the cheapest deal. As a young driver, you can also try taking the advanced driving course, consider placing the telematics device7 on your car, reduce your annual mileage, find deductibles8, and getting rid of the non-essential optional extras from your policy.

Therefore, don’t fall into the trap of car insurance fronting trying to look for ways to cut down your insurance costs. Be smart and make the right moves – your future depends on it, literally!

Also make sure you keep an eye on your motor warranty cover.

John Duckett
John Duckett

John helps individuals get the best deal on car insurance. He advises on how to match client needs with budget and successfully negotiates with insurance houses to exceed client expectations. Working in the online space is his passion, he loves to share his knowledge on insurance and keeps an updated blog.

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