General Insurance Article - 25% of parents are ‘fronting’ their childs car insurance

Research commissioned by, and carried out amongst 2000 UK parents of children aged 16 to 25, has revealed that 25% of those whose children are driving have insured their child’s car in their own name in order to get cheaper car insurance premiums.

  The practice, known in the industry as ‘fronting’ is fraudulent, invalidates a policy and could land in court those who knowingly try to fool insurers into charging lower premiums. A further 41% of parents of young drivers said they would consider fronting a car insurance policy for their child.
  1.   25% of parents of young drivers are insuring their child’s car in their name
  3.   49% think young driver insurance premiums are a ‘rip-off’
  5.   38% believe high premiums are pushing young drivers to drive uninsured
 The average cheapest car insurance premium for a driver aged 17 to 25 is £1480.37* and 50% of the parents who took part in the study felt that insurers should be doing more to help young drivers with the cost of getting on the road. 49% felt that young driver car insurance premiums were a ‘rip-off’ and 38% believed that high premiums for young drivers will push more of them into driving without insurance.
 Matt Oliver, car insurance spokesperson for said:
 “Insurance premiums for new, inexperienced drivers can seem high and people are often surprised at how much they are compared to the value of the car they’re insuring. However, for Insurers the cost of replacing the car is small compared to the potential cost of other elements of claims involving young drivers such as personal injury claims for passengers and injuries and damage caused to third parties and their vehicles. Unfortunately drivers aged 17 to 20 are twice as likely to make an insurance claim as other drivers and their claims costs will be three times higher**.
 “Although it’s understandable that a parent would want to help their child with the cost of getting on the road, insurance fraud is not the best option. Insurers look closely at their customers when they make a claim and there’s a good chance that any ‘fronting’ will be uncovered if parents do have to claim on the policy. If found out the policy may be invalid and the child may find themselves liable for all of the accident costs and the parent may find themselves in court and unable to get insurance in the future.”
 Parents can encourage their children to find more affordable car insurance premiums by shopping around for the best value policy and considering the following money saving tips:
  1.   Consider a higher excess – This may lower your premium but you will need to decide if paying a slightly lower premium is worth the risk of having to contribute more towards the cost of a claim if you have to make one.
  3.   Consider a ‘telematics’ policy – If you’re happy for your driving to be monitored a ‘telematics’ policy where a GPS-enabled transmitter is fitted to your car, or monitored through the use of a smart phone app, can give you a lower premium and if you prove to be a safe driver your premiums may fall more quickly than with a traditional policy.
  5.   Added extras – Consider whether you really need added extras such as a courtesy car, legal assistance, breakdown cover and key cover. Some policies include these types of cover as standard or as add-ons but they’re not free – the cost will be built into the premium so you may be able to save money by dropping them.
  7.   Adding a safe driver – Adding another named driver with a clean licence and several years claim free driving to young driver’s policy could reduce their premium. This is one way a parent can help their child to get lower premiums without breaking the law.
  9.   Sensible cars - Young drivers’ insurance premiums will be lower if they drive a standard car with a small engine (under 1000cc) in a low insurance group. It may not be their dream car but it is wise to drive something smaller and slower until they’ve built up some no claims bonus and have shown a safe driving record.

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