By Jeremy Sirrell, Supervising Director, Palmers Solicitors
The Insurers Fraud Bureau (IFB) has put out a warning to drivers who may be considering placing themselves as a named driver on someone else’s vehicle insurance policy when in fact they are the main driver.
This is typically as a result of the rising cost of insurance, leaving many drivers, usually young drivers, unable to afford their own insurance with themselves as the principal driver.
Instead, another person, very often the parent, will take out an insurance policy, naming themselves as the principal driver and the real principal driver simply as a named driver.
This is known as ‘fronting’. It has become much more commonplace – with recent publicity revealing quotes as high as £8,000 per year for a new driver, and an average of £1,533.
Is fronting allowed?
A deliberate lie in order to obtain insurance is a form of fraud and the results of such a fraud could be:
- That the policy is declared null and void, leading in turn to a possible prosecution to driving without insurance; or
- The insurance company may refuse to pay out on a claim in the event of an accident and indeed may itself consider a prosecution for fraud against the policy holder.
Often drivers, particularly parents who wish to assist their children, do not appreciate the importance of being accurate when giving information to their insurance company.
As the practice of putting children on as named drivers has become so common, people do not consider it unusual when in fact, the named driver becomes a principal driver – and may not appreciate the implications of this on an existing policy.
What do drivers need to know?
If a driver or policy holder is accused of fronting, then they need to make sure that they are clear in what they have said to the insurance company.
In particular, drivers will need to be clear on the actual use that the car has been put to, including who the true principal driver of the vehicle is.
This may mean (but would not necessarily be exclusively confined to) the person who drives the car most, which may be most often or most miles.
Of course, it is very difficult for anyone to know that information outside of the policy holder or named driver themselves, but a giveaway might be, for example, where a named driver on someone else’s policy has an accident on the way to their work.
Someone who is using the car everyday to drive to and from work is almost certainly a principal driver and not a named one.
Perhaps part of a solution might be for insurers to reconsider the way they accept young drivers either as principal drivers or as named drivers.
Additional questions may better indicate the intended drivers and make the policy terms clearer, particularly to policy holders.
They may also provide the insurance company with additional information they can use to check up on in the event of a claim.
Ultimately, however, the responsibility currently lies with the drivers and policy holder to ensure they are remaining compliant with the terms of their insurance policy – regardless of how common the practice is now becoming.
To speak to Jeremy Sirrell and our Road Traffic Offences team, please contact us.