Vehicle insurance premiums are largely based on the details of the owner, who is usually the most frequent rider. That is why determining primary and secondary driver is usually necessary when you are looking for quotes. In an honest world, the primary is the person who uses the automobile most. However, people may not be as forthcoming with the truth when they realize that listing the higher risk motorist as the main user is going to cost a lot more.
Auto insurance fronting is telling companies that a better driver is the main user when the vehicle is actually for the use of a high risk person, who is often a teenager. This may save money now but it can be problematic when there is a claim.
Experience, claims, records and age are key considerations when premiums are calculated. Obviously, an older person with long and clean record will get much cheaper auto insurance rates in comparison to a young person with limited history and statistically considered dangerous.
Usually, youngsters get added to the policy of the family car. In such cases, there is hardly any question that parents are the owner and main user. However, it isn’t really the honest practice when they buy a second car for the sole use of the teenager and cover it under their names and add the child to it.
In such cases, it is clear whom the car is for. They may think that they got away with cheap rates. However, companies are known to investigate deeper when there is a large claim. Fronting for more perilous motorists for the purpose of getting lower rates is a fraud and it could have serious consequences. They can refuse to pay for a claim and take it even one step further and report the crime to the authorities.
How to Know You Are Fronting or Not?
Knowing how expensive premiums can be for high risk drivers, It is understandable why people list the safer person as the most frequent operator. Actually, agents may suggest this as well in an effort to give the best quote when they insure multiple drivers on one policy. When it isn’t a clear cut who the car is for, motorists can get away with this practice or even be advised to take advantage of the good records. Yet, you should be careful not to cross over the grey area and fall into red.
Remember there are many ways of finding affordable insurance for risky drivers. Perhaps you should try them instead when you realize you may be doing it the wrong way. Just shopping for the best rates can save you several hundred dollars. Every company is different in the way they evaluate details. That is why when one carrier considers someone hazardous the other can be more comfortable with it.
How Insurers Deal with Fronting
Carriers are naturally aware of certain practices. One way some deal with it is that they charge the highest rates for at least one car when a family has two cars and teenagers on the policies. In other words, people may be giving misleading information and still getting charged appropriately for their position.
Again, some carriers may turn a blind eye but others can investigate and report any policyholder who is suspected of helping others to reduce premiums. Certainly, it is a tricky business. When you are trying to save a few bucks you can end up losing thousands of dollars if a claim gets denied.
Usually, when there is only one car in the family it is hard to argue over who is the primary. But it is more contentious when there is more than one car.