Par­ents risk thou­sands in po­ten­tial le­gal costs

The Peterborough Evening Telegraph - - Et Business -

PAR­ENTS who are break­ing the law to save money on car in­surance for their chil­dren are risk­ing the pos­si­bil­ity of be­ing landed with life crip­pling court costs.

An ever in­creas­ing num­ber of par­ents are ly­ing on in­surance pol­icy ap­pli­ca­tions and claim­ing they are the main driv­ers of cars that are, in fact, used by their off­spring.

The prac­tice is called “fronting”, but what many par­ents do not re­alise is that it could lead to pros­e­cu­tion.

Nigel Lacy, co-founder of Whit­tle­sey-based Young Mar­malade, which sells car and in­surance pack­ages specif­i­cally for young driv­ers, said: “If the child has an ac­ci­dent and in­jures a third party the in­surer could refuse cover leav­ing the par­ent po­ten­tially li­able for hun­dreds of thou­sands of pounds in costs.”

Par­ents can be ex­pected to find a stag­ger­ing £4,000 per year to in­sure a young driver but, ac­cord­ing to Ash­ton West, of the Mo­tor In­sur­ers’ Bureau, this fig­ure “ac­cu­rately re­flects the risk posed by young driv­ers”.

Young Mar­malade was cre­ated to re­duce the cost of in­surance for young driv­ers. By com­bin­ing car pur­chase and in­surance as a pack­age, Young Mar­malade uses the ben­e­fits of vol­ume to of­fer young­sters re­duced in­surance.

“Of­ten we are able to of­fer our monthly pack­age of car plus in­surance at less than the monthly cost of tra­di­tional in­surance,” said Mr Lacy.

Re­search con­ducted by Young Mar­malade in as­so­ci­a­tion with First Car Mag­a­zine dis­cov­ered that 41.79 per cent of par­ents were ac­tu­ally fronting poli­cies for their chil­dren.

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