Top Gear’s top tips for cheap car insurance could land you in hot water
Among the tongue-in-cheek car insurance advice offered up during last night’s episode of Top Gear (BBC Two, 8.00pm Sunday 28 June 2009), Clarkson and Co. highlighted a common fraud often unintentionally carried out by well-meaning parents – that of ‘fronting’.
Fronting occurs when parents insure a child’s car in their own name adding their child, the real main driver, to the policy in an attempt to keep costs down. This seemingly innocent practice is in fact illegal and some insurers have even changed their underwriting criteria to prevent this by charging for the highest risk driver, even when this isn’t the main driver.
Hayley Parsons, chief executive of Gocompare.com commented, “We commend the Top Gear trio for highlighting the difficulties young drivers face when looking for car insurance; but we are concerned that fronting was touted as a sure-fire way to save money. While few people would take Clarkson’s suggestion that a sex change could help 17 year old boys halve their premiums seriously, fronting is a common fraud and we would urge parents to avoid the practice as, if found out, the consequences could be severe.”
During last night’s episode James May said: “It soon dawned on us that the only realistic way of getting covered when you are 17 is by going on your parents’ insurance. So we got back on the phones pretending to be dad.”
And this has been a fairly widely used method to cut insurance costs, as research previously carried out for Gocompare.com in 2007 revealed. The findings of that study indicated that to save money, two thirds (66.4%) of parents would consider breaking the law by fronting.
But May’s co-presenter Richard Hammond was quick to add a caveat: “Can I just point out before we do move on; if you do decide to put yourself on your parent’s insurance and you have a crash, and the insurance company find out that it wasn’t really your car… they won’t pay out, then they can prosecute you and you might have to go to jail…”
Hammond is right; where this fraud is exposed, insurers have the right to cancel the policy or charge the correct premium as a lump sum. Drivers who have had a policy cancelled will have to declare this on any future applications and will find it harder and more costly to buy insurance because the majority of insurers would refuse them cover.
Insurers can also refuse to pay-out for any claims or can settle a third party claim and recover the cost from the parent as the policyholder. If the insurer declines a claim, the young driver could be treated as uninsured and could be fined hundreds of pounds and receive six penalty points (an automatic ban for new drivers). They will also face higher insurance costs in the future.
Hayley continues: “With car insurance premiums at very high levels, it’s only natural that parents would want to help their children get on the road. But, it was surprising that so many were prepared to lie to their insurance company to do so.
“Parents shouldn’t be tempted to hide a young motorist as a named driver on a policy. An insurance policy is a contract based on trust and you are obliged to tell the insurer of anything that could influence their decision in offering cover - the age and experience of a driver are both important factors. Not telling the truth about who is the principal driver is a fundamental breach of trust and is technically fraud which may result in a policy being cancelled and any claim refused.
“As well as being illegal, fronting is a false economy. Insurers are wise to the practice and many now set the price according to the age of the youngest driver on the policy. In the long run it is better for young drivers to hold insurance in their own name to build-up valuable no claims discount.”
Gocompare.com has produced the following checklist to help younger drivers keep their premiums low:
• Generally, the lower the engine capacity, the lower the premium – ideally an engine size of less than 1200cc is best. Also, avoid models with letters after it, for example ‘i’, ‘sxi’, ‘gti’ or ‘xl’.
• Avoid vehicles with any modifications from the standard manufacture.
• Consider taking the Pass Plus training course which is designed to give new, young drivers additional practical driving experience. Once completed, the course normally entitles drivers to reduced premiums. Visit www.passplus.org.uk for more information.
• Shop around for your insurance – don’t settle for the first quote you are given.
• The cost of taxing a vehicle can also vary, depending on the CO2 emissions that it produces. The lower the emissions, the cheaper the cost of vehicle tax. The UK fuel economy label will help you choose a vehicle which is fuel efficient and produces lower carbon emissions. These are ranked from Band A to Band G*. More information can be found at: http://www.direct.gov.uk/en/Motoring/OwningAVehicle/HowToTaxYourVehicle/DG_10012524
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For further information please contact:
Lynsey Walden at Gocompare.com on 01633 654 55
Anders Nilsson at Gocompare.com on 01633 657 599
Gordon at MAW Communications on 01603 505 845
Jason Wyer-Smith at MAW Communications on 07824 818 242
Notes to editors:
The research for Gocompare.com was carried out online by Tickbox.net August 2007 amongst a nationally representative sample of 1,733 UK adults.
* Band A cars do not cost anything to tax as they produce under 100g/km in carbon emissions. An example of a Band A car is the Polo Blue Motion 1.4 Tdi 80PS. Cars in Band B will cost £35 for the year, and this includes Toyota Aygo (1.0 VVT-i) or a Peugeot 107 1.0 (65 bhp). In contrast, a Peugeot 207 1.6 THP will set you back £165 for the year.
About Gocompare.com
Gocompare.com launched in November 2006 to help people find the right insurance cover at the right price. It was founded by Hayley Parsons who has worked her entire career in the insurance broking and aggregator markets and was the first comparison site to focus on displaying product features rather than just listing prices. It was this philosophy that led to Gocompare.com becoming the first price comparison site to be invited to join the British Insurance Brokers Association (BIBA) in May 2008 and helped force older comparison sites to change their ‘quick quote’ ways and stop using assumptions to calculate estimated figures.
Today, Gocompare.com provides one of the most comprehensive online car insurance comparison services in the UK as well as comparing home, motorbike and van insurance.
Gocompare.com is authorised and regulated by the Financial Services Authority.