The number of fraudulent ‘fronting' cases rises amongst car insurance claims
It has been revealed that the practice of ‘fronting' has climbed dramatically over the last two years according to a recently published report. The rise in the number of cases where parents insure their child's car in their own name to try to keep costs down, but in fact, the child is the main driver of the vehicle, is seen by law as a fraudulent act of deceiving the insurer.
‘Fronting' has now become a major car insurance fraud problem, but the report is set to uncover that this and other schemes of submitting falsified information by consumers has increased by 30 per cent since 2007.
These deceitful claims are now costing the insurance industry billions of euros each year and are set to continue to rise. It is thought that the crackdown on insurance cheats when they are making a claim has actually led to this climb in fraud, but the industry is determined to attack these figures too.
One insurance expert said, "Through closer scrutiny of proposal forms and claims, as well as the exchange of information through industry-wide databases, the net is tightening on the cheats. Anyone who sees insurance as a soft touch can end up with a criminal record, credit problems and costlier and harder-to-obtain insurance."
Although ‘fronting' is classed as a fraudulent act, many parents are unaware it is a criminal offence and carry out the practice in blissful ignorance, but industry bosses are appealing to parents to avoid the exercise as it may result in severe consequences.
The reality is that if ‘fronting' is detected when a claim is made, insurers can refuse to pay out for any claims or can settle a third party claim and recover the cost from the parent as the policyholder. However, if the insurance company denies the claim, the young driver can be treated as an uninsured motorist and face a large fine and even penalty points on their license. They are also likely to face higher insurance premiums in the future.
The report has also highlighted an increase in ‘walk away' claims which involve the insurer being suspicious of possible fraud, so will ask for further details from the claimant, at which point the claimant no longer pursues the claim. Although this is not confirmation a fraudulent claim has been attempted, the insurance industry believe it is a likely indicator of such behaviour.
Rochelle Martinez, Freelance Web Content Article Writer for three years. Some of her articles are about http://www.quinn-direct.com.
Article Source: ArticlesBase.com
