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insurance fraud?
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walkingaline wrote: »Why do you care? I know of plenty of people that do this. And, jd87, how exactly are they making your insurance more expensive?
Fronting increases the cost of insurance for everyone. If people insured their cars legally, then costs would be cheaper for all.
Some recent news stories...
http://www.guardian.co.uk/money/2009/jul/12/car-insurance-fraudif fronting is detected, insurers can refuse to pay out for any claims or can settle a third-party claim and recover the cost from the parent as the policyholder. If the insurer declines a claim, the young driver could be treated as uninsured and could be fined hundreds of pounds and receive six penalty points (an automatic ban for new drivers). They will also face higher insurance costs in the future.Mr Lacy relays an occasion where an insurance company that suspected a customer of fronting went next door to their neighbours to enquire who drove the car most. "With a loud exhaust, music blaring and tinted windows – revenge is sweet," he said.
This case resulted in the insurance company rejecting the claim for comprehensive cover of the customer's vehicle, but paid out the third party liability – it is now taking the parents to court to recover these costs.
The case could end up in the criminal courts, Mr Lacy warns, because it is classed as insurance fraud, and, in order to recover the third party expenses, the insurance company can seek a charging order on the parent’s house or an attachment of earnings order, potentially wrecking their future.
Meanwhile, if the child is found to be driving without the appropriate insurance, they could have their licence revoked and be forced to take a re-test.
Another consequence of fronting is that getting car insurance for both the parent and child in the future could be tricky and expensive, because the rejected claim will remain on the motor insurance database.0 -
walkingaline wrote: »Why do you care? I know of plenty of people that do this. And, jd87, how exactly are they making your insurance more expensive?
Simple mathematics, Insurers charge a premium based upon the actual risk of the policy holder having a claim, they know what to charge from many years of statistics. If they Insure a car where the young drivers parents say they are the main user then the Insurer does not collect a premium thats relevant to the risk of a claim.
The result is they pay out more in claims then they would have done if they had not been miss led. They then increases all of their other policiy holders premiums to take into account the effect on their losses / profits.0 -
Walter-Ego wrote: »Of course if insurers detected the fronting and refused the claims then their costs would decrease and premiums would fall.:cool::rotfl:
Don't think so, surely the are less un-insured cars on the road now & premiums haven't come downANURADHA KOIRALA ??? go on throw it in google.0 -
We are in a recession so unfortunately the amount of uninsured drivers tends to increase.
Insurance premiums normally increase in a recession for numerous reasons0 -
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I think in fact 'the friend' isn't the case here.
It's infact the OP that is committing insurance fraud
I wonder when this bull s******g would start. I stated in the original post that I am the resigtered owner of my car, and my insurance policy is in my name. I'm not committing fraud in any way shape or form.I suspect by the tone of the original post one of three things
(a) the O/P offered advice to the friend when he/she was buying the car but the father 'knew better'
(b) the friend - probably of similar age to the o/p - drives a better / higer insurance grouped car than the o/p.
(c) both of the above.
Firstly, yes I've been told their dad knows more about motoring than I do, thats why I came on here to see if anyone could clear it up for me before I bring it up with them. I only intend on bringing it up because they are planning on moving out, and I am worried they have not thought everything through and their car insurance is a major worry to me, as they are a very good friend and I dont want to see them getting into trouble with the law because they have not thought everything out properly.
Secondly, I believe our cars are in the same insurance group, there is only a year or so differnce between the 2 (reasonably small) cars and both are 1.2L0
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