Car insurance rate hikes lures parents into fronting

Rampant increases to car insurance rates has led to parents being lured into the trap of  listing themselves as the primary driver of their son or daughter’s car, an illegal practice called ‘fronting.’

Car insurance companies hold a dim view of parents who engage in fronting as it is illegal and technically insurance fraud.  However, with discount car insurance for young drivers exceedingly hard to come by, it is tempting for parents to save quite a bit on a policy price for their child by listing themselves as the primary driver, which leads to reduced premium prices because of their lower-risk status.

Instances of fronting have recently doubled, according to the Financial Ombudsman Service.  The consumer complaint watchdog stated that around 50 reports of fronting are dealt with on a monthly basis, and many cases are a result of steady car insurance premium price increases in their opinion.

According to the AA, the average comprehensive cover cost increased by 40 per cent between March 2010 and March of this year.  Younger motorists  saw even larger increases, as those between the ages of 17 and 22 now pay an average  £2,431 in insurance costs, which represented a 64 per cent increase.

Spiralling costs have gotten the Office of Fair Trading so concerned, it recently announced it will be conducting an investigation into whether or not the industry has been overcharging its customers.  Meanwhile, one spokesperson for the FOS said that the largest proportion of the cases it was seeing involved people who had misled their insurance providers out of a misguided need to save cash wherever and whenever they can.

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