Swiftcover reveals scope of 'fronting fraud'

An estimated 36,000 parents are committing fraud by illegally putting their sons and daughters down as a spouse or partner on their car insurance policy, according to swiftcover.com.

The online insurer says that one in four policy holders it contacted over concerns with their motor insurance admitted they had put down their son or daughter as a spouse or partner instead of as a ‘named driver’, a form of ‘fronting’, claiming it was a mistake.

However, the majority then chose to cancel their policy and seek insurance elsewhere rather than pay a higher premium.

swiftcover reviewed more than 4,000 policies in 2009 following concerns about fronting, out of a total 720,000 policies in force. Of those reviewed, more than 1,100 admitted they had put a son or daughter on their insurance policy as a ‘spouse’ or ‘partner’.

On this basis the estimated 24m motor insurance policy holders in the UK, at least 36,000 are committing the same fraud.

swiftcover.com says the number of customers fraudulently passing off a son or daughter as a spouse or partner has almost doubled in the last two years.

Robin Reames, claims director for swiftcover.com, said: “Trying to buck the system by fronting is not only illegal, it actually ends-up costing law-abiding motorists if they are involved in an accident with a fronted driver who is actually an uninsured driver.”

Fronting is where an older driver is insured as the ‘main driver’ of a vehicle, but the vehicle is driven primarily and often owned by a much younger driver, who is then usually added to the policy as a ‘named driver’ to bring down the cost of their insurance cover. Passing the younger driver off as a ‘spouse’ or ‘partner’ can reduce insurance costs even further.

Based on its own review of policies, swiftcover.com says the wider problem of fronting is even bigger, and the company reckons that at least 150,000* drivers every year are purposely misleading their insurers.

Reames said:“The expense of uninsured drivers and fraud is pushing up the cost of insurance premiums for everyone – so parents who think they are helping by fronting for their children are both breaking the law and making car insurance more expensive for everyone else. We understand that insurance is costly for younger drivers, but premiums reflect the number of claims they are involved in and therefore the level of risk they pose.”