The issue of fronting is being brought into the limelight as the Office of Fair Trading has waded into the car insurance market to “deal” with the issue of sky rocketing premiums.
Fronting is when a parent insurers themselves as the main driver of their parents car. This is to cut the cost of insurance.
Insurance for males who have just past their test can easily be 2000GBP or more.
Fronting is see as a way of cutting the cost of insurance for the child
Unfortunately, if the parent declares themself as the main driver when there are not and the child in ivnolved in an accident, the insurance policy could be deemed void.
Fronting could be classed as fraud but in reality there is simply no way of combating this practice unless insureres were to go after parents who were being truthful by simply quoting for the riskiest driver on the policy.
Short of this parents could easily rotate the car that their child used so in reality, the child was actually using the car for less than half the time it was on the road.
However the situation develops, the question that has to be asked is that if the parents are prepared to lose their no claims bonus if they were to have to make a claim, surely that has to count for something. ie if the parent thought the child was liekly to have an accident, surely they wouldnt be risking their no claims bonus.
Ultimately though, the free market will adjust to this situation and to highlight the insignificance of the issue the Financial Ombudsman Service claim there are only 50 claims brought to their attention a month and by no means are all of these issues found in favour of the insurance company.
Fronting is when a parent insurers themselves as the main driver of their parents car. This is to cut the cost of insurance.
Insurance for males who have just past their test can easily be 2000GBP or more.
Fronting is see as a way of cutting the cost of insurance for the child
Unfortunately, if the parent declares themself as the main driver when there are not and the child in ivnolved in an accident, the insurance policy could be deemed void.
Fronting could be classed as fraud but in reality there is simply no way of combating this practice unless insureres were to go after parents who were being truthful by simply quoting for the riskiest driver on the policy.
Short of this parents could easily rotate the car that their child used so in reality, the child was actually using the car for less than half the time it was on the road.
However the situation develops, the question that has to be asked is that if the parents are prepared to lose their no claims bonus if they were to have to make a claim, surely that has to count for something. ie if the parent thought the child was liekly to have an accident, surely they wouldnt be risking their no claims bonus.
Ultimately though, the free market will adjust to this situation and to highlight the insignificance of the issue the Financial Ombudsman Service claim there are only 50 claims brought to their attention a month and by no means are all of these issues found in favour of the insurance company.
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