My Mum was completely against gambling. But she did the football pools for years. My Uncle was someone who fervently believed in buying things when he had saved for them, he was completely against borrowing and looked down his nose at anyone who used credit. He had a mortgage. Hypocrites? Perhaps they were in the truest sense of the term, but to meet them you would never consider them to be anything but salt-of-the-earth types who conducted their lives in an open and honest way.
Psychologists will probably tell you that such behaviour is rooted in a human need to justify one’s own actions. I don’t know about that as I am not a psychologist. But, as an insurance broker with 30 years experience, I do know I have spoken with an awful lot of salt-of-the-earth-types who conducted their lives in an open and honest way, apart from the fact they were fraudsters. To be more specific, insurance fraudsters who are practicing something called “Fronting”
Fronting is the practice whereby an older, experienced driver falsely insures a vehicle in their own name, but the actual main driver is younger and therefore, in the eyes of the insurer, a higher risk. The reasons for doing it are glaringly obvious with the costs of car insurance for younger drivers commonly being in four figures, any way of getting those costs down are going to be considered. The problem is that the older driver, more often than not doesn’t fully understand that they are committing a criminal offence for which they can find themselves in court and with a criminal record.
One of the most common situations is when a parent, after seeing the eye watering premiums required for their son or daughter to insure a vehicle in their own name, has a tinker on the price comparison site and finds a much more acceptable figure if they take out the insurance themselves and add the youngster as a named driver. The fact that the child is going to be the main driver, and may even live miles away is self justified by the fact that money has been saved and it is just a way of “playing the system”. I have been told on many occasions that “everybody does it” and “insurance companies expect you to do it and they factor it in on everybody’s premiums” They don’t, and I don’t think they do.
In most of the cases I have come across, the perpetrators of Fronting are well meaning and decent people. The idea that they are criminals and could end up with a criminal record would be totally humiliating to them. But, that is exactly the risk they are taking, and a defence of “I didn’t know it was wrong” won’t effect the outcome of the court case.
In reality, the chances of being found out remain quite low until there is a claim involving the younger person. It is highly likely that any accident involving the younger named driver will be looked into more thoroughly than if it involved the older one. If the accident occurs in a different area than the one you live in, such as the university town where your son or daughter is living, or you have failed to disclose their address to the insurer, then alarm bells will be ringing in the claims department of the insurance company – and the consequences of being found out are dire.
If getting a criminal conviction, being fined and probably having it reported in the local press isn’t enough. The actual insurance consequences, both initially and long term, are pretty grim as well. Firstly, the insurer is within its rights to decline to pay out on the claim. If the accident involved a third party, and especially a third party injury, this could be very expensive as although the insurer would meet those costs, they could then attempt to recover them from you.
The insurer could choose to cancel the policy, leaving your child without insurance. This could lead to further legal problems as they would then be deemed to have been driving without insurance which is also an offense that can lead to fine, points on their licence and possibly a driving ban. It goes without saying that any thoughts of trying to save any money on future car insurance will go straight out of the window as you will both struggle even to find an insurer, let alone one that will give you the kind of competitive premiums you were used to.
Away from the car insurance problems that you will face for many years, the knock on effect of having a conviction for fraud will crop up in many aspects of your life; including your job, getting a mortgage or any type of credit and even your health as the whole stress of the situation will take its toll on you.
Fronting, however well intentioned, is obviously a bad idea, but how do you know if you are doing it? Like I said, most people who get tangled up in this mess do so without malevolent intent. To be fair, it is not always clear who is the main driver, especially if a number of people use the vehicle. As a rule of thumb, if you use the car for commuting, or just use it every or most days then you should be put down as the main driver. If you are in any doubt, be straight with the insurer, tell them everything you think they might what to know about you, the named drivers and the vehicle. It will save you money and a whole lot more in the long term, and possibly in the short term if you’re son or daughter is unlucky enough to have an accident.