Further to that last story about the correct definition of insurance fronting, I was reading this article from Zurich Insurance.
The corroborating evidence at the bottom of the story makes especially interesting reading.
Topline statistics:
- 9 per cent of parents and grandparents who have helped a child or grandchild buy a car surveyed have it insured in their own name
- 13 per cent have done so in the past
- 59 per cent of people surveyed who have helped their child or grandchild buy a car do not realise fronting is against the law
- 39 per cent believe fronting is legal
- 68 per cent of parents and grandparents surveyed who have fronted have done so to help their child reduce insurance premiums
- 19 per cent believe the car should be insured in their name as they are the registered as the owner
- 46 per cent of those who have helped their child or grandchild buy a car think that the person on the insurance policy could be fined, while 24 per cent realise that it would be the driver who would be fined
- 30 per cent believe that it is the policyholder who could stand to receive penalty points, while just 22 per cent realise it would be their driver.
Penalties for fronting:
- A policy may be cancelled
- A claim may be refused
- Driver may be given a fine
- Driver may receive penalty points
- Driver may have to re-sit their driving test
It’s quite shocking, isn’t it? And yet it is these same people who would ignorantly and aggressively defend their actions right up until the time they realise they don’t have anywhere else to go, and feign “shock and surprise” at what was probably clear to them all along.
Also, on the forum I mentioned in the previous article, someone has identified several cases where people who were fronting had policies voided by their insurers. However, the Ombudsman decided in their favour on appeal.
As you can imagine, this is likely to be seen as evidence that fronting isn’t wrong by those who openly advocate it, or who try to convince themselves that they aren’t really doing it by repeatedly denying it. However, there are two aspects of the Ombudsman’s findings that need to be remembered:
- the three test cases date from 2001-2005
- the findings relate solely to having not had the issue of fronting made clear at the time the policy was taken out
So reading between the lines, in the three cases the insured person kicked up a stink and managed to persuade the Ombudsman that they didn’t know about fronting and that it wasn’t explained to them when they took the policy out. You can believe as much or as little of that as you want – but the Ombudsman obviously did. The bottom line is that they got off on technicalities – they were still deliberately trying to get lower insurance premiums.
So, with the most recent test case being 6 years ago, and with fronting being an increasingly serious problem during the last two years, it doesn’t take a genius to work out that anyone found to be fronting now would be far less likely to convince anyone that they “didn’t know”. Furthermore, with companies like Tesco now having the guts to include specific wording describing what they would consider to be fronting, people would have even less chance of convincing anyone that they “didn’t know”.
Tesco Says:
We understand that it can sometimes be unclear who the main driver of a car is so we have provided clarification below to explain situations in which we would treat the young driver as the ‘main driver’.
- If a young driver regularly uses a car to drive to or from work / place of education then they should be the registered main driver.
- If a young driver uses the car on a daily basis, then they should be the registered main driver.
- If the car is maintained by the young driver, then they should be the main driver.
The sooner other insurance companies pull their fingers out and do something similar, the sooner the problem is likely to be brought under control.
For anyone who thinks fronting is OK, just think what it means to you when the very group of people who you really want to have valid insurance (due to the number of accidents it has) is the same group actively engaged in fronting.
You are basically driving alongside high-risk drivers who are effectively uninsured.