Comments on: Top Gear’s car insurance advice about fronting could cause big problems http://www.moneyhighstreet.com/finance-news/top-gears-car-insurance-advice-about-fronting-could-cause-big-problems/ The latest personal finance news and information Sat, 11 Feb 2012 12:04:58 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Yulfie http://www.moneyhighstreet.com/finance-news/top-gears-car-insurance-advice-about-fronting-could-cause-big-problems/#comment-1240 Yulfie Wed, 01 Jul 2009 12:17:27 +0000 http://www.moneyhighstreet.com/?p=2981#comment-1240 There is an irony here in that the CEO of a comparison site is the one that is complaining, when it is the comparison sites that have largely created the situation in the first place. For years insurance companies relied upon inertia and they would have clients for longer so they could balance the premiums over a period of time. This way they could turn a blind eye to the occasional fronting situation, on the basis that the young drivers will grow up soon and become a proper paying customer. I am not suggesting that was the right thing but there was a balance. Along come the comparison sites and rip the bottom out of the market, destroy the loyalty, as they are all fighting to bring the customer the best deal. This has forced many insurance companies to retreat to the lowest risk areas, leaving the young drivers high and dry as the few insurance companies left in this sector now only have a single year premium to balance their books, before the customers are off searching the comparison sites chasing the next deal. To maintain their margins the insurance companies are hiking the prices for young drivers and investigating any claims for the opportunity not to payout, particularly as personal injury claims are increasing the level of payouts. One of the easiest ways to create a fronted policy is through a comparison site, as they are so keen to sell a policy on price, the validity of the information is secondary. The guys at Top Gear did a fabulous job of highlighting an issue and they repeated several times the problems that young drivers face if they do try and front insurance through their parents. The comparison sites need to put their own house in order before commenting from the sidelines merely to promote their own business. If your kids get in a friend's car should they check the insurance of the driver? If the insurance is in a parent's name the chances are the insurance is not valid, so who pays out in the event of a life changing injury? If the driver is liable, that driver should be backed up by the insurance company. If the policy is invalid, what are the chances of successfully suing the driver and getting compensation? That will be a long hard battle that could destroy many families and make lawyers richer There is an irony here in that the CEO of a comparison site is the one that is complaining, when it is the comparison sites that have largely created the situation in the first place.

For years insurance companies relied upon inertia and they would have clients for longer so they could balance the premiums over a period of time. This way they could turn a blind eye to the occasional fronting situation, on the basis that the young drivers will grow up soon and become a proper paying customer. I am not suggesting that was the right thing but there was a balance.

Along come the comparison sites and rip the bottom out of the market, destroy the loyalty, as they are all fighting to bring the customer the best deal. This has forced many insurance companies to retreat to the lowest risk areas, leaving the young drivers high and dry as the few insurance companies left in this sector now only have a single year premium to balance their books, before the customers are off searching the comparison sites chasing the next deal.

To maintain their margins the insurance companies are hiking the prices for young drivers and investigating any claims for the opportunity not to payout, particularly as personal injury claims are increasing the level of payouts.

One of the easiest ways to create a fronted policy is through a comparison site, as they are so keen to sell a policy on price, the validity of the information is secondary.

The guys at Top Gear did a fabulous job of highlighting an issue and they repeated several times the problems that young drivers face if they do try and front insurance through their parents. The comparison sites need to put their own house in order before commenting from the sidelines merely to promote their own business.

If your kids get in a friend’s car should they check the insurance of the driver? If the insurance is in a parent’s name the chances are the insurance is not valid, so who pays out in the event of a life changing injury? If the driver is liable, that driver should be backed up by the insurance company. If the policy is invalid, what are the chances of successfully suing the driver and getting compensation? That will be a long hard battle that could destroy many families and make lawyers richer

]]> By: Anonymous http://www.moneyhighstreet.com/finance-news/top-gears-car-insurance-advice-about-fronting-could-cause-big-problems/#comment-1237 Anonymous Tue, 30 Jun 2009 22:40:57 +0000 http://www.moneyhighstreet.com/?p=2981#comment-1237 To be honest, I don't see the reason why car insurance companies charge young drivers so much. It just seems as they use the silly laws to back up their money draining schemes. It is wrong to say that all young drivers have a much higher risk of having an accident. Some people learn to control a car much better then others. It depends entierly on the person. In my eyes older (over 50) are more likely to have an accident on the road or cause an emergency sitiuation due to the slower reflexes. If insurance companies want to make still want to rip off money of people, they should use a more fair system of judging how likely the driver is to have an accident. It is a stupid idea to charge people so much. Just think of families with less income who can't help the younger driver with paying for the costs of running a car including insurance costs. This would mean the driver wouldn't be able to get a car till much later in life and let's say the driver is 25 when they first get a car. So, from the insurance company's point of view, the driver would be less likely to have an accident due to their age despite being a very unexperienced driver. To be honest, I don’t see the reason why car insurance companies charge young drivers so much. It just seems as they use the silly laws to back up their money draining schemes.
It is wrong to say that all young drivers have a much higher risk of having an accident. Some people learn to control a car much better then others. It depends entierly on the person. In my eyes older (over 50) are more likely to have an accident on the road or cause an emergency sitiuation due to the slower reflexes.
If insurance companies want to make still want to rip off money of people, they should use a more fair system of judging how likely the driver is to have an accident.
It is a stupid idea to charge people so much. Just think of families with less income who can’t help the younger driver with paying for the costs of running a car including insurance costs. This would mean the driver wouldn’t be able to get a car till much later in life and let’s say the driver is 25 when they first get a car.
So, from the insurance company’s point of view, the driver would be less likely to have an accident due to their age despite being a very unexperienced driver.

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