Majority of insurers calculate vehicle insurance premiums largely based on the details of the main driver. That is why determining primary and secondary driver is usually necessary when you are looking for quotes. In an honest world, the primary driver 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 driver as the main user is going to cost a lot more.
Auto insurance fronting is telling insurers that a better driver is the main user when the vehicle is actually for the use of an expensive to insure driver, who is often a teenager. This may save money now but it can be problematic when there is a claim.
Driving history, claims record and age are key considerations when insurers calculate premiums. Obviously, an older person with long and clean driving record will get much cheaper auto insurance rates in comparison to a young person with no records.
Usually, young drivers get added to insurance 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 teenage driver and insure it under their names and add the young person to the policy.
In such cases, it is clear who the car is for. They may think that they got away with cheap rates. However, insurers are known to investigate deeper when there is a large claim. Fronting for riskier drivers for the purpose of getting lower rates is an insurance fraud and it could have serious consequences. The carrier can refuse to pay for the claim and take it even one step further and report the crime to the police.
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 lowest risk person as main driver. Actually, insurance 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 driving records of the one of the drivers. 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 fronting. Just shopping for the best rates can save you several hundred dollars. Every company is different in the way they evaluate your details. That is why when one insurer price the risks associated with you driving much higher the other can be more comfortable with it.
How Insurers Deal with Fronting
Carriers are naturally aware of certain practices. One way some insurers 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 fronting and still getting charged the rates appropriate for their position.
Again, some insurers may turn a blind eye but others can investigate and report any policyholder who are suspected of fronting for others. Certainly, it is a risky business. When you are trying to save a few bucks you can end up losing thousands of dollars if your claim gets denied.
Usually, when there is only one car in the family it is hard to argue over who is the main user. But it is more contentious when there are more than one car.