According to AA Insurance, nearly half of drivers believe that it is acceptable to reduce car insurance premiums for young drivers by insuring the car in a parent’s name, naming a young driver as a ‘named driver’.
This is known as ‘fronting’ – where a named driver on a policy is the person driving the car most or all of the time.
And alarmingly, 1% of drivers considered it acceptable to drive without any insurance in order to avoid high young driver premiums.
This comes at a time when the Financial Ombudsman * is featuring a fronting case-study following a customer complaint, which it did not uphold and in its latest report the ombudsman notes the significant proportion of young consumers’ complaints that are motoring-related.
Michael Lloyd, the AA’s insurance director, points out that ‘fronting’ has long been an issue for car insurers but it is regarded as fraud.
“The cost of insurance for a new, young driver is often eye-watering,” he agrees, “so it’s understandable that families might want to look for ways to cut that cost.
“For many people, a parent insuring a youngster’s car and adding them to the policy as a ‘named’ (or occasional) driver might seem to be a legitimate way to get costs down but they may not recognise the potential consequences.”
According to the latest AA British Insurance Premium Index, the typical quoted premium for someone aged 17-22 is £1,436, more than double that for someone aged 30-35 but for a newly qualified driver, with no no-claim bonus, it could be much higher than that.
Lloyd pointed out, “A quarter of young drivers (23%) aged between 17-24 will have a crash within two years of passing their driving test thanks to a combination of youth and inexperience. They are also much more likely to be in collisions that involve death and serious injury.