The rapid rise in the price of petrol, as well as other motoring costs, has come as a severe blow to most of us. However this is nothing new to young drivers, who have suffered from the high cost of car insurance for years. Statistics confirm that young drivers are far more likely to be involved in an accident than older road users. Indeed, their cars are stolen more often as well, which has led to sky high premiums being charged.
Keith Maxwell, says that young drivers typically pay up to 1,500 pounds a year for car cover. Premiums can be reduced by a half to two-thirds by building up a no-claims bonus he said.
Another popular, although unethical, way to slash high insurance premiums for young people to be put on the insurance policies of their parents as a named driver. The premium is then based upon the claims record, driving history, age and occupation of their fathers and mothers, rather than of their children. The cost of becoming a named driver may be as low as 10% of the premium.
However, young drivers may be playing a dangerous game as, in reality, the main driver is often the son or daughter. This practice is known as fronting and may, technically, be considered to be fraud. The autumn, when many teenagers are going back to college or university, is the prime time for fronting.
Keith Lewis said that parents and their children may not be aware that they are committing an offence by fronting. A young person takes the car to college, for example, and, by doing so, becomes the principle driver and yet the name of the parent is still on the policy as the principle driver, he said.
Either people just do not think, or they assume that it is legal. It has serious implications, as, not only may a claim be refused, but both the parents and the young person could face charges for insurance fraud. However, fronting can be hard to detect prior to a claim being received.
Mr Lewis adds that, experience has shown, people usually tell the truth immediately after an accident, as they do not have sufficient time to concoct a cover story. That is the time when they divulge that they usually drive the car and not their parents, adds Mr Lewis.
The person who handles claims is trained to spot other key indicators of fronting. For instance, if a car is insured under the name of a parent living in Newcastle, but the car is involved in an accident in Oxford, then it is probable that fronting is taking place.
Erik Nelson, says that fronting is a false economy. You are not only driving without insurance, which could invalidate your cover, but you are not building an all important no-claims record, which will enable you to qualify for lower premiums in the long run. Bite the bullet and start earning a no-claims discount, Mr Nelson says.
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