What is fronting?

Fronting is one of the biggest problems facing the insurance industry. The term basically describes a type of fraud, but one that many policyholders do not even realise they are committing. It can, however, have serious consequences.

Insuring high-risk drivers, for example a younger driver who has just passed their test, can be more costly than insuring an experienced motorist. Fronting occurs when a more experienced driver takes a policy out in their name and cites the riskier motorist as a named driver, when in fact the less experienced driver is the person who will be using the vehicle the most. Doing so can bring the price of the insurance down, but could declare it void in the event of a claim.

A common example of fronting is a parent looking to secure car insurance for their child who is starting university. The senior driver will state that they are the main user, when in fact the vehicle will spend its time travelling to and from a university campus.

Many people who 'front' do not know it is illegal, and instead think they are being savvy with their insurance. But if the young driver is the owner or keeper of the car, then the policy should be in their name. At the very least, they should be declared as the main driver.

Fronting will most likely be discovered when a claim is made. If it is the named driver who is involved in a collision, for example, an insurance provider may launch an investigation.

Should the insurer conclude that fronting has occurred, it may refuse to pay for any damage. If a third party was involved, the insurance company would be obliged to cover the cost of the repairs, but may try to recoup its expenses from the policyholder. If the courts become involved, the policyholder may also be charged with fraud.

In the simplest of cases, the company may just cancel the policy, or refuse to continue with it until the correct premium is paid. However, in either situation, the young motorist could be in a position where they are accused of driving without insurance, which is illegal, leading to points on their licence and fines. Both will result in the cost of future premiums rising even further.

For any new insurance application, a policyholder must also declare whether they have had a previous policy cancelled or ever been refused cover. If this has happened due to fronting, it too may lead to increased costs.

There are other ways to save money on insurance premiums that do not involve fronting:

Ask the insurance provider about fitting a GPS-enabled tracker to the car, which will monitor how it is driven. New motorists will then be able to prove that they are a careful, low-risk driver, which means they could get a reduced premium.

New drivers can take a Pass Plus course after passing their test, which involves taking additional lessons that cover night, motorway and town traffic driving. Obtaining a certificate can also reduce their insurance.

If you can afford it, settling the entire premium in one go, rather than in monthly instalments, could also work out cheaper.

Consider a less powerful car for the younger driver that belongs to a lower insurance group. Generally, these cars will also be the cheapest to repair and run.

Some insurance companies will recognise certain makes of car alarm and immobiliser. Ask which ones, get them fitted, and it could reduce your premium. Simple precautions such as keeping the car in a secure location can also have an effect.