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Parents warned about lies on child’s car insurance

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by Kay Mitchell

60% of parents have admitted that they would think about insuring their child’s car in their own name and then adding the child as a named driver. This would reduce the cost of the car insurance but is against the law and parents doing this practice, known as “fronting”, risk fines.

A spokesperson for the insurance comparison website, gocompare.com, who conducted the survey, remarked that it’s not surprising that parents want to help their children as insurance premiums have escalated.

However, parents should not conceal a young motorist as a secondary driver on a policy. If they are found out, insurers will cancel the policy or charge the correct premium as a lump sum.

Those who have had a policy cancelled will have declare it on future insurance applications and it will be very hard to purchase insurance. Also, insurers can refuse to pay for any claims or can settle a third-party claim and regain the cost from the parent as the policyholder.

gocompare.com added that if the insurer rejects a claim, the young motorist could be treated as uninsured and could be fined hundreds of pounds and receive 6 penalty points on their licence – an automatic ban for new drivers.

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Story link: Parents warned about lies on child’s car insurance

News posted: September 25, 2007

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