One in ten parents of young drivers risk a criminal record for pretending to be the main driver on the car insurance policy, new research has uncovered.
A survey of 1,000 parents of young drivers aged 17 to 25 found that 10% admitted to insuring their son or daughter’s car in their own name to save money on premiums.
The tactic sees a parent insure themselves as the primary driver on a vehicle, despite their offspring being the one using the car most often, with the youngster registered as a named driver instead.
However, this is actually a form of insurance fraud. If uncovered, the policy will be invalid and the policyholder could end up with a criminal record. In addition, the policyholder will have to pick up the cost of third-party claims that are still settled by the insurance company – which could potentially cost them hundreds of thousands of pounds.
Don’t commit insurance fraud to save a few pounds
Lee Griffin from comparison site GoCompare, which commissioned the survey, said: “Unfortunately, many parents are putting themselves at risk of picking up a criminal record for the sake of reducing their child’s car insurance premiums.
“There may not appear to be any harm in insuring a child’s car in a parent’s name, but ‘fronting’ is illegal nonetheless. Car insurance premiums for new drivers can be high compared to those offered to more experienced drivers, but there’s a good reason why.
“According to the ABI (Association of British Insurers), drivers aged between 17 and 20 are twice as likely to make an insurance claim as other drivers and the cost of their claims can be up to three times higher than the average.”
The survey also discovered that a third of parents (34% of people surveyed) would consider employing the tactic to drive down new driver premiums.
The fraud is usually exposed when a claim is made. Insurers will investigate the details of an accident, at which point they usually find that the son or daughter has been driving the vehicle more often than the parent.
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