Parents urged not to commit 'fronting' fraud
Personal insurance
9th June 2010
Many parents are not aware that a practice called 'fronting' in the UK insurance policy industry is fraudulent, new research shows.
According to a study published by the Motor Insurers' Bureau (MIB), people are risking invalidating their cover and committing fraud by taking out products in their names to reduce the premiums of their sons or daughters.
The MIB warns such action is against the law, although 70 per cent of drivers polled were unaware of what the term fronting means and that they could face penalties, additional costs, fines or prosecution for doing it.
A campaign by the organisation entitled Stay Insured is attempting to highlight the potential risks of fronting, particularly as 35 per cent of drivers justify it as a legal loophole and ten per cent believe it to be legitimate.
Young people have the highest rates of incidents and therefore attract larger premiums than other motorists, with MIB chief executive Ashton West advising: "Insurance is about peace of mind and knowing that the cost of your liability on the road is covered."
Meanwhile, motorists were also warned by the British Insurance Brokers' Association recently that misfuelling errors could cost more than £5,000 to correct, as one in three policies do not provide cover for this mishap.
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