Parents claim kids as ‘spouse’ to cut car insurance costs

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 - a crime known as fronting - according to online insurer swiftcover.com.

swiftcover.com 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', claiming it was a mistake - however, the majority then chose to cancel their policy and seek insurance elsewhere rather than pay a higher premium.

These figures would indicate that of the estimated 24 million 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, warns that insurers are cracking down on suspected fronters. He says: "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 actually 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. But 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 continues: "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."

swiftcover.com says insurance companies share information between themselves and other agencies to help spot the tell-tale signs of attempted fraud. For example, older policy holders who add a spouse or partner who is much younger are likely to have their insurance reviewed and face additional checks.

And whilst it is not illegal to have a younger named driver on a policy, drivers insuring multiple cars - usually three or more, and probably with different insurers - might also be asked to prove that they are indeed the main driver for all the vehicles insured in their name.  In addition, insurers are investigating claims in more detail and could reject a claim when fronting is suspected.

If fronting is proven, the younger driver's insurance policy will be invalid, so not only will the driver face a fine and penalty points for driving without insurance, any insurance claims they have made will be rejected, leaving them out of pocket and possibly facing further legal action from third parties involved in an accident.

Furthermore, anybody caught fronting - both the younger driver and the older driving committing the fraud - will face much higher insurance premiums in the future and may even be turned down by many insurers.