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Member, Beacon International Group, Ltd.
Despite the possible consequences, one in 10 parents said they’d lie to lower Junior’s car insurance rates.
According to a survey by Gocompare.com Ltd., 12% of parents surveyed said they would insure their child’s automobile under their name to reduce the premium the child would have to pay, the Newport, Wales-based insurance comparison service said in a statement Monday.
The practice, where a lower-risk party, such as an older driver, insures the vehicle for a younger, higher-risk party, who is the actual driver, is known as “fronting” and is considered insurance fraud in the United Kingdom.
Lying to insurers could invalidate a policy and, worse, could lead to criminal charges, Gocompare said.
Regardless, 13% of parents surveyed confessed to having lied on their own insurance application and nearly one-quarter said they would consider lying to their insurance company to reduce their premiums, Gocompare said.
The survey showed that 87% of respondents acknowledged that they understood that their insurance claim could be rejected as a result of lying to their insurer.
“We can’t stress enough the importance of telling insurers the truth, as any deviation from the facts may result in any future claims being refused,” said Scott Kelly, head of motor at Gocompare.com, in the statement. “There are plenty of perfectly legal ways to reduce premiums for young drivers which don't result in them being underinsured or criminally liable.”
Instead of fronting, parents can add themselves as a named driver on their child’s policy, which can lower premiums. Also, a telematics policy, where a global positioning system-enabled unit is fitted to the vehicle that tracks driving patterns, also can lead to lower premiums, Gocompare said.