Parents 'warned over car insurance fronting'

Monday, 07 June 2010

Parents are being warned that they may inadvertently be committing car insurance fraud if they put their children on their own motor insurance policies.

"Fronting" is commonly used in the UK. It is a practice where parents insure a vehicle under their own name even though it is mostly used by their son or daughter.

The Motor Insurance Bureau (MIB) has said that not only is this an illegal act, but if people falsely declare information on their car insurance policy then they invalidate it.

This would result in them not being able to make a motor insurance claim.

Without correct and adequate car insurance in place, both the policyholder and driver could be subjected to penalties, fines or even prosecution.

Chief executive of the MIB Ashton West said: "There is a lot of confusion amongst drivers about the importance of giving accurate information about the main driver to an insurer.

"There is a need to help drivers understand and appreciate the importance of being adequately insured."

According to data from the MIB, uninsured driving costs more than £500 million every year and adds around £30 to each motorist's annual car insurance premiums.

Posted by Claire Carter

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