Older Children On Parent’s Motor Insurance

THE AVERAGE age of a child named as a second driver on their parent’s car insurance is a staggeringly high 31 years old.

Families are clearly being hit hard by the credit crunch, as the average age of a named driver just a year ago was 25, suggesting that the boomerang generation is continuing to rely on the bank of mum and dad for financial support.

There are 10m drivers in the UK who have a second named driver on their car insurance, and 2.5m of these motorists have added their children to the policy.

The figures, calculated through a survey by uSwitch.com, comes as the nation sees a rise in reported cases of car insurance fraud through ‘fronting’ – where a parent puts the policy in their own name when, in fact, their child is the main driver – have gone up by a third in the last two years.

Undetected general insurance fraud, which includes bogus claims on both motoring and household insurance, is estimated to have risen by around a quarter, from £1.6 billion two years ago to £1.9 billion now.

Mark Monteiro, insurance expert at uSwitch.com, said: "Not only are hard-up ‘kidults' living at home for longer, but they are hanging around on their parents' insurance policies for longer too. It is no secret that younger drivers pay far higher premiums than older motorists because of the higher risk involved - but many are now getting around it by becoming a named driver on their parents' policy instead. The practice becomes illegal though when a younger motorist buys and registers a car in their own name, but the insurer is told falsely that a parent is the main driver.

"'Fronting' is a serious fraud and penalties for being caught could be severe. If detected, 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. If the insurer declines a claim, the young driver could be treated as uninsured and could be fined heavily and receive six penalty points - resulting in an automatic ban for new drivers as well as setting them up for higher insurance costs in the future.

"Insurance fraud simply adds to the overall cost of insurance - in other words consumers end up picking up the tab. Ultimately, committing insurance fraud is not worth the risk. If affordability is an issue, there are steps you can take: look at increasing your excess, downgrade your cover, trade your car in for one in a cheaper insurance class, but above all shop around for the best deal. You could save up to £160 by taking this last step alone."

Insurance fraud now adds around £44 a year to each motoring or home insurance policy, pushing the cost of premiums even higher. So much so that for some young motorists, they feel it is worth the risk of driving illegally with no insurance at all.

Mr Monteiro added: “Some young motorists are taking cost cutting to an extreme with as many as one in five – that is 250,000 17-20 year olds - driving without insurance, according to the Motor Insurers' Bureau (MIB). In the current economic climate it's also unsurprising that many feel forced to downgrade their type of cover to ‘Third Party'. Young drivers are not alone in this - one in five of all third party policy holders have opted for a reduced level of cover because they are simply unable to afford fully comprehensive cover in the current financial environment.”

However, fully comprehensive policies can be cheaper than third party cover in some instances, so it is well worth checking out both.

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