Insurance fronting in the news
Reports show that as much as 41% of parents deliberately lie when filling out car insurance policy applications – and that number is only set to rise. But are they going about tackling it in the right way?
In a process known as “fronting”, when the parents ring up or fill in forms for car insurance, they claim to be the main drivers on the policy, when in fact it is one of their children who is the main driver, or owner of the car – which usually offers large savings, but could also lead to prosecution.
According to numerous sources, Co-operative Insurance found that almost half of the nation’s parents were actually fronting policies, while 61% admitted that they would do so in the future.
The industry is warning that it is an extremely risky practice – indeed, there is a law society that presumably deals with this sort of thing all the time, and a growing number of legal services that have to deal with this so called “fronting”, as well as a growing number of car insurance fraudsters.
Tim Franklin, of Co-operative Financial Services, said: “The view that motor insurance fronting is harmless and does not hurt anyone could not be further from the truth.”
He added: “Parents who believe they are helping their children to save money by fronting are not only risking prosecution, but harming their chances of obtaining insurance in the future.”
But the real scam, I think, is the insurance companies themselves.
They charge extortionate rates to these young kids passing their tests. How are they supposed to stump up thousands of pounds, when they are 17 years old, and have just shelled out all their money on a car?
Never mind accident claims for compensation, which seem to be on the rise, or the multitude of claims for whiplash injury compensation – the real problem is the fact that these people charge way too much money. It’s no wonder parents are resorting to “fronting” to help save money.
The issue seems to be being tackled in precisely the wrong way. Cut down the costs, and there will be no fronting to worry about.