A huge number of people across the country could be facing many potential problems as a result of fronting insurance policies for other people.
It is estimated that around two million motorists currently list themselves as the main driver on a vehicle that someone else uses far more often to help reduce the overall cost of insurance for younger, less experienced or high-risk drivers. However, whilst many drivers assume that this is merely a cunning trick, ‘fronting’ is actually illegal and could render a policy completely invalid should it be discovered.
Whilst some listing themselves as main driver do indeed use the vehicle in question on a sporadic basis, others listing themselves as main drivers on a policy will never even have driven the vehicle in question at all.
Whilst fronting a policy is unlikely to affect the premium paid by policy owners on their own vehicle, the act could significantly reduce the cost of running a car for younger individuals or those without no claims bonuses. In turn, it may seem to make sense to help friends or family members out by reducing the cost of their insurance policy through fronting. However, if an insurance company has cause to believe that the policy was indeed fronted, drivers could find that payouts are not forthcoming or that policies are completely invalidated, leaving drivers liable for potential prosecution.
There are other issues surrounding the driving of cars owned by others too. Not only will those who are only named drivers on a policy not be able to drive any other vehicle they are not a named driver on, but even those who are full policyholders are often unaware of their legal rights when driving alternative vehicles. Not all policies will cover policy owners for driving other people’s cars and even those that do will only cover the driver for damage to other vehicles or property. As such, if they are involved in an accident that is their fault, any damage caused to the car they are driving will not be covered and in turn the potential costs associated with driving a car that you are not registered as a policyholder could be very significant indeed.
The cost of insuring younger or inexperienced drivers can be significant, but premiums are actually falling at the moment as opposed to rising. This means that any individual currently fronting a policy for someone else should look at changing this immediately, not only to avoid the serious repercussions that could arise should the duplicity be uncovered, but also to ensure that alternative policies can be found at a far more favourable cost.
With the government having clamped down on fraudulent car crash and personal injury claims, insurers have been able to show a communal profit for the first time in two decades and in turn policy costs have fallen significantly, by an average of almost 20% over the past 12 months.
Talking to reputable insurers could help individuals to work out the best approach to sourcing car insurance, whether this is to opt for third party policies to start with and to alter this once no claim bonuses have been accrued or whether it is to simply get fully cover right away, at a time when premiums are at their lowest in years.
Author bio: Alan Holmes is a freelance writer and blogger. He regularly writes articles about motor insurance and claims management services, using sites such as Action to stay up to date with all the latest industry news anddevelopments.