Don't make this car insurance mistake - video script

Rachel Robson takes a closer look at the fraudulent practice of fronting.

I'm Rachel Robson for lovemoney.com. And in today's Soapbox I'm going to examine a car insurance practice known as fronting.

Earlier this year, the Association of British Insurers revealed that insurance fraud has increased by a massive thirty percent since 2007.

Part of this has been due to a car insurance practice known as fronting. This often occurs when a young person buys a car and registers it in his own name, but informs the insurer that his parent is the main driver.

The reason for doing this is to simply reduce the car insurance premium. After all, if a more experienced driver with a decent no-claims history is the main driver, the cost of insurance will be far lower than if the younger, more risky, driver was the main policyholder. 

What could happen?

However, this is an act of fraud, and if you need to make a claim and you get caught out, it's very likely your claim will be rejected.

What's more, the young driver could be treated as uninsured and could be heavily fined. It's also likely the young driver would receive penalty points on his driving licence which could result in a driving ban. And of course, your insurance costs would go up in the future.

What about for husband and wife?

Generally speaking, fronting isn't an issue for a husband and wife. If you both use the car the same amount, it doesn't matter who is classed as the main driver. That's because you're usually around the same age and you have similar risk profiles.  

The only time this would be an issue is if one of you had several motoring convictions which would create a higher risk profile. In this case, the higher risk driver should be named as the main policyholder.

Be honest

Overall, the moral of this story is to be as honest as you can when applying for car insurance. And if you're not sure about anything, ask the insurer. This may mean your premiums will be higher, but this will be well worth paying if the worst did happen and you had to make a claim.

Don't forget, you can compare car insurance right here at lovemoney.com, and if you're looking to cut your car costs, you can adopt one of our goals to find out how.

That's it from me today. Thanks for watching and see you next time.

Watch the video here.