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Parents 'Commit Fraud for Young Drivers'

Oct 13, 2007

THOUSANDS of parents are unwittingly committing fraud by insuring their child's car in their own name.

And yesterday they were warned that this can lead to claims being declined, leaving the young driver uninsured and possibly facing a ban.

A YouGov survey for Zurich Insurance shows one in ten parents and grandparents who have helped youngsters buy a car have it insured in their name, with the youngster a named driver.

But Zurich said this was 'fronting' - the insurance fraud of the named driver actually being the main driver.

Yet 60 per cent of 'fronting' parents said they did not realise they were in the wrong, confessing that they had insured in their names to reduce premiums.

Zurich's Scott Clayton said: 'They also don't realise it is a false economy. In an accident, an insurer could decline a claim or recover any third-party costs from the child or parents.' He said that if insurers declined a claim, police could also treat the young driver as uninsured, meaning he or she could get six penalty points - and an automatic ban for a new driver..

(c) 2007 Mail on Sunday; London (UK). Provided by ProQuest Information and Learning. All rights Reserved.

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