Thursday 25th October 2007
The Financial Ombudsman Service (FOS) warns consumers against car insurance fronting, reports the BBC.
Lead insurance ombudsman Peter Hinchcliffe told BBC Radio 4s Money Box programme that the practice could prove troublesome should a claim be made.
Fronting involves a young persons parent being named as the primary driver of a vehicle in order to reduce car insurance premiums while the child is away at university or when they have recently passed their test.
But the FOS advises the BBC that it deals with between 100 and 200 cases of fronting each year.
This suggests a total of closer to 1,000 claims being handled by the insurers themselves, the industry body explains.
Mr Hinchcliffe told the show: "This is a question of the evidence, so if you are the parent and you have said you are the main driver and the car has been in an accident - or stolen - at your son or daughters university, you have got a lot of work to do to explain how that has come about."
Adrian Webb, head of corporate communications, echoes the warnings and suggests that such activities could be seen as fraudulent.
"The truth is, any act of deception to try to get a lower insurance premium with your insurance company is tantamount to fraud," he contends to the BBC.
Insurers could well be on the lookout for any suspicious details listed on policies, according to the Association of British Insurers.
Spokesperson Malcolm Tarling warned recently that insurers are "getting better at detecting fraud" due to a greater awareness of the "telltale signs".
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