Parents can invalidate their child’s car insurance policy with this one simple error

Parents can invalidate their child’s car insurance policy with this one simple error

Car insurance policies could be axed leaving many customers forced to pay out for expensive car repairs themselves. Parents could lie on a policy by including themselves as a named driver on an agreement to lower costs. 

This is because overall car insurance prices are calculated as an average of both named drivers average perceived risks. 

Adding an older, more experienced driver to a young motorists agreement is likely to reduce overall charges. 

This is perfectly legal if both the parent and child split the driving between them so each party covers similar distances. 

However, road users could be committing a type of insurance fraud known as fronting if the child uses the car for much more than their parents.

READ MORE: Motorists lie to insurers to reduce costs but run serious risk

Why are people fronting?

The Association of British Insurers (ABI) says young drivers between the ages of 17 and 24 were more likely to make a car insurance claim than other age groups. 

Because of this young motorists pay inflated car insurance prices compared to other road users which can be too expensive for many. 

Data from GoCompare shows the average price of car insurance for 17 year olds stands at over £1,000 compared to just £534 for other road users.

Research from the group in 2018 found 10 percent of parents have already committed fronting offences on their child’s car insurance. 

Their study found one-third of moroests admit they would consider fronting on policy if it helped save their children money. 

Can I change my insurance to make sure I am not fronting? 

A study by the Co-Op has found over four in five motorists were not aware fronting was illegal. 

The findings raise the risk of motorists potentially breaking the law by accident without even realising they have done so. 

Mark Allen, fraud and financial crime manager at the ABI said most insurers will not punish innocent mistakes but would crackdown on those breaking the law. 

He said: “The consequences include getting a criminal record and a massive financial headache if found to be at fault for a crash.

“The risks are just not worth it – especially when you can shop around for the right policy at the lowest price.”

How can I reduce car insurance legally 

Young motorists have been urged they can reduce their overall car insurance prices legally with simple solutions. 

The RAC says road users will be able to save money with black box telemetry installed in their vehicles as costs are calculated by the way you drive rather than perceived risks. 

Young drivers can also reduce costs on their policy by lowering the number of miles they travel each year.

Published at Sat, 21 Mar 2020 10:01:00 +0000