A survey by Young Marmalade, the combined car purchase and comprehensive insurance scheme linked to new and nearly new cars on a lease purchase plan for young drivers, has revealed the true cost of insurance fronting for Britain’s young drivers.

Crispin Moger, managing director of Young Marmalade said, “After quizzing young drivers on their insurance cover, we estimate that a quarter of a million new road users insure the car they drive all the time as a named driver on their parent’s insurance policy. This is classed as insurance fronting by the Financial Ombudsman and can result in a fine, conviction, penalty points and a loss of licence.”

Almost half of the young drivers questioned in Young Marmalade’s insurance survey admitted that they are insured on their parent’s policy. That’s bad news for both driver and policy holder. Insurance companies take a very dim view of insurance fronting and are clamping down on claims by drivers named as a driver but in reality, are the most frequent user of the vehicle. As many as 1000 claims a year are rejected due to fronting. As well as the claim being refused, the policy holder may struggle to find affordable cover in future as any denied claim must be declared. With insurance companies holding a database of claims history, there’s no escape for parent or child found guilty of trying to trick their insurance company with a policy class as fronting.

David Benedict of Young Marmalade says this very real cost of insurance fronting is having a profound effect on the market. It may even explain the dearth of affordable policies for young drivers. “Many insurance companies are assessing the risk and basing the premium on the youngest driver regardless of their status as a main driver, named driver or just an occasional driver of the car. Some companies are even withdrawing from this sector of the market as the claim ratios have gone through the roof. It is the driver’s responsibility to ensure they have adequate cover and a defence of ‘I thought I was covered’ will no longer wash.”

One possible cause behind the rise in insurance fronting is the cost of getting on the road in the first place. As a learner driver, driving lessons, licenses and exams all mount up but they pale in comparison to the cost of purchasing a safe, reliable vehicle and combining that with comprehensive insurance cover. Young Marmalade has tackled this problem head on with its car purchase and low cost, comprehensive insurance package. Offering no less than four NCAP star-rated new and nearly new cars plus affordable cover in the event of theft or an accident, the scheme is helping to tackle insurance fronting head on.

Now in its third year of operation, Young Marmalade is a signatory to the European Road Safety Charter, one of just four companies in the UK involved with vehicle safety to have signed up to the Charter.