This sounds like 'fronting' to me....experts advice please

edited 30 November -1 at 1:00AM in Insurance & Life Assurance
16 replies 1.2K views
Littlemiss-lotsofdebtLittlemiss-lotsofdebt Forumite
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edited 30 November -1 at 1:00AM in Insurance & Life Assurance
Hi all

I love MSE and spend lots of time reading the various boards so I'd like to think I've learnt a few things, but just wanted to run something past the experts on here.

OH's cousin, 21 (despite numerous protests :mad: ) has just bought an Impreza, and I found out a few days ago that he has it insured third party, fire and theft in his mum's name, with him as a named driver. Now, his mum has her own car and I can't see her setting foot in the Impreza, so I think this is fronting and the insurers wouldn't pay out in the event of a claim. OH thinks I'm talking nonsense and says that everyone does it, but I don't think it sounds kosher to me.

Could anyone confirm?

Thanks, and hope you've had a lovely Christmas :beer:
Its nice to be important but more important to be nice!
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Replies

  • jem16jem16 Forumite
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    If he is the main driver then yes what he is doing is "fronting" and could invalidate his policy. The insurance companies are well aware that people try this to reduce premiums. In the event of a claim they may well investigate further and refuse to pay out.

    Yes a lot of people do it but it doesn't make it legal.
  • If OH's cousin is the main driver they are very clearly 'fronting' and they are fully aware of what they have done. It seems like a white lie but is actually insurance fraud. OH's cousin is misrepresenting the risk to the insurer to get lower premiums.

    A 21 year old with an impreza - how incredibly subtle. The insurance company could spot this blindfold at 1,000 paces in the event of a claim.

    Insurance companies take a dim view of this and will ask some difficult questions if he has an accident on the way to/from work.
  • Thanks guys, I was beginning to think I was a little neutotic (sp). The chance of him wrapping it round a tree, unfortunately, or having it nicked is probably higher than most and I was worried about him not being able to claim.

    Trouble is, he's sorted the insurance out now so I'm not quite sure where he goes from here!
    Its nice to be important but more important to be nice!
  • dunstonhdunstonh Forumite
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    I read the FOS publications which includes samples on complaints they uphold and reject and fronting like this is documented in one of the publications. Someone put in a complaint when the insurance company refused to pay out and the FOS agreed with the insurance company and rejected the complaint.

    Here is the copy and paste from the publication and the outcome:
    [FONT=Verdana, Arial, Helvetica, sans-serif]07/18
    ins-sq.gifmotor – misrepresentation – owner of vehicle – father insuring son’s car – whether insurer entitled to cancel policy. [/FONT]
    [FONT=Verdana, Arial, Helvetica, sans-serif]Mr H insured his car, with his son as a named driver. After the car was stolen from a supermarket car park, the insurer investigated Mr H’s theft claim and discovered the car was, in fact, registered in the name of the son, and the son was also responsible for the financing arrangement. The insurer refused to meet the claim and cancelled the policy from its start date. [/FONT]
    [FONT=Verdana, Arial, Helvetica, sans-serif]Mr H admitted that he had taken out the policy in order to reduce the premium by using his no claims discount, but he argued that his son was the main user of the car. [/FONT]
    [FONT=Verdana, Arial, Helvetica, sans-serif]complaint rejected
    We accepted that the fact the son was the registered owner of the car was not conclusive. However, the evidence showed clearly that the son – rather than Mr H – was the main user. Mr H had misrepresented the position to the insurer and its decision to treat the policy as if it had never come into force was fully justified. [/FONT]


    here is a copy and paste of a recent article that appeared as a link from the FOS site:
    Lead insurance ombudsman Peter Hinchcliffe told BBC Radio 4s Money Box programme that the practice could prove troublesome should a claim be made.

    Fronting involves a young persons parent being named as the primary driver of a vehicle in order to reduce car insurance premiums while the child is away at university or when they have recently passed their test.

    But the FOS advises the BBC that it deals with between 100 and 200 cases of fronting each year.

    This suggests a total of closer to 1,000 claims being handled by the insurers themselves, the industry body explains.

    Mr Hinchcliffe told the show: "This is a question of the evidence, so if you are the parent and you have said you are the main driver and the car has been in an accident - or stolen - at your son or daughters university, you have got a lot of work to do to explain how that has come about."

    Adrian Webb, head of corporate communications, echoes the warnings and suggests that such activities could be seen as fraudulent.

    "The truth is, any act of deception to try to get a lower insurance premium with your insurance company is tantamount to fraud," he contends to the BBC.

    Insurers could well be on the lookout for any suspicious details listed on policies, according to the Association of British Insurers.

    Spokesperson Malcolm Tarling warned recently that insurers are "getting better at detecting fraud" due to a greater awareness of the "telltale signs".
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Thing is.....what are you actually going to do about it, if anything? Did you just want the right info so you can have an accurate conversation with your OH...or are you going to report him? Things like this can cause a massive family upset depending on your stance.
  • Thanks guys, I was beginning to think I was a little neutotic (sp). The chance of him wrapping it round a tree, unfortunately, or having it nicked is probably higher than most and I was worried about him not being able to claim.

    Trouble is, he's sorted the insurance out now so I'm not quite sure where he goes from here!


    autotrader!
  • jeanette251978jeanette251978 Forumite
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    zebidee1 wrote: »
    Thing is.....what are you actually going to do about it, if anything? Did you just want the right info so you can have an accurate conversation with your OH...or are you going to report him? Things like this can cause a massive family upset depending on your stance.


    Well i think its best to let them learn the hard way! the funny thing is IF they want to claim and it is rejected - who will be stamping feet? it wont be the insurer!

    Also, another way to look at this is, its an expensive piece of paper, because the certificate is all it is, a piece of paper! it means nothing - its not valid.
  • Ian_WIan_W Forumite
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    zebidee1 wrote: »
    Thing is.....what are you actually going to do about it, if anything? Did you just want the right info so you can have an accurate conversation with your OH...or are you going to report him? Things like this can cause a massive family upset depending on your stance.
    I would suggest the OP prints off dunstonh's response containing the FOS attitude and comments for her OH, the cousin and his dad.

    If the motor gets nicked then jeanette251978 is probably right - they've paid for a very expensive piece of paper and probably won't get anything back for the car.

    If he has an accident involving injury/damage to a third party then they will be covered, either by the insurer or the MIB. However, the insurer/MIB will certainly be entitled to recover their costs from the cousin and his dad - possibly a life changing [in a bad way:eek:] sum of money!

    If either happens they'll probably be cacking themselves if they need to claim. Don't personally think it is for the OP to report them - simply to point out to them that what they're doing is wrong and if they get caught could lead to dire consequences for them.
  • jonesMUFCforeverjonesMUFCforever Forumite
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    If it was me I would report them - it might be my family or friend that he could seriously injure or kill!
  • zebidee1 wrote: »
    Thing is.....what are you actually going to do about it, if anything? Did you just want the right info so you can have an accurate conversation with your OH...or are you going to report him? Things like this can cause a massive family upset depending on your stance.[/quot

    Just to update you, I printed Dunston's response off last night and handed it to OH, who has since mentioned it to his mum, stating our concerns. She will no doubt let OH's Auntie know (who has insured the car in her name for her son - and who, I think doesn't have a clue this is illegal), so the ball is now in their court so to speak. Not sure if that is enough, but as Zebidee and others have said, things like this can cause massive family rucks.

    Thanks for your comments.
    Its nice to be important but more important to be nice!
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