Be honest about the main driver – or face losing your insurance

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CAR owners who mislead insurers about the main driver of the vehicle are being warned that they could find their policies invalidated if their ‘white lie’ is discovered.

Known as ‘fronting’, the deception involves naming one person as the main driver when in fact, the second named driver will use the car the most.

It is common for parents to do this in order to reduce the premium when their child needs car insurance – but few people realise it is a form of fraud.

If a claim is made and the ‘fronting’ is discovered, the policy could be declared void, leaving the policy holder liable for any damage or injuries.

Glyn Jones, head of insurance for DWF LLP’s Leeds office, said: “Where there is the potential to make a noticeable saving on premiums, there is always going to be a temptation for parents to do what they can to save their children money but this is one loophole which is increasingly being tightened.

“Moral arguments aside, parents may wish to ask themselves whether it is worth the risk to them and their child of being exposed to a substantial financial burden if they are unfortunate enough to be involved in an accident and have their policy invalidated.”

Meanwhile, DWF has also warned about a less commonly-known rule: failure to disclose material fact, which involves not telling an insurer about something which they might reasonably want to know.

Currently, anyone who fails to declare something which could affect a policy could find it declared invalid – even if the insurer did not ask directly about it.

However, from next year, new legislation will mean policy holders no longer need to volunteer facts – but will need to answer questions fully and honestly.

If a response later turns out to be incorrect, but was given honestly at the time, the policy will remain valid. However, policies can still be declared invalid if the response was given carelessly or deliberately, when a correct response would have led to refusal of insurance.

Although the cost of premiums has reportedly risen, the average household expenditure only increased by £4 to £549 from 2006-2010.