Many people may not be aware of what fronting is, or its implications for the car insurance industry.
A recent study conducted by the Motor Insurers' Bureau (MIB) discovered that 70 per cent of people do not know what the term means, suggesting more education is needed on the subject.
Fronting occurs when a person gives false information relating to the main driver of a vehicle. In many cases, this will be a parent declaring themselves as the principle driver, when in reality it is their less experienced child.
Because the adult has more experience behind the wheel, this will mean their premiums are lower, therefore enabling them to cut outgoings.
Sounds pretty harmless, right? Wrong. The MIB stresses that if a claim were to be made on a fronted policy, insurance companies have every right not to pay out.
Chief executive Ashton West explains: "In the event that the driver of a fronted policy is involved in an accident, both the policyholder and the driver could be open to additional costs, penalties, fines and - potentially - prosecution. It simply isn't worth the risk."
He emphasised that car insurance firms may refuse to provide the necessary compensation and will decide to look to recoup costs from either the policyholder or driver.
Of the drivers questioned who are aware of fronting, ten per cent said they believe fronting is a perfectly legitimate way of cutting the cost of their car insurance.
Meanwhile, 35 per cent said it was a loophole in the law they could take advantage of.
It is worth remembering that fronting is a type of fraud, which is a growing problem for the country's insurance industry.
In fact, statistics from the UK Insurance Fraud Bureau reveal that undetected false claims in the UK add around £44 to an annual policy. |
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