Potential Consequences Of Fronting Auto Insurance Coverage
Auto insurance fronting involves lying to your insurer and saying that you are the main driver of a car instead of someone else, like your teenager. Some people use it as a means of getting cheap coverage for their children since teenagers typically attract high rates. Unfortunately, it can result in different forms of problems, such as:
Policy Cancellation
It is your insurer's prerogative to warn you or cancel your policy if it learns that you are fronting. Since cases of insurance fraud are on the rise, insurers are leaning more towards cancellation of policies as a way of deterring would-be fraudsters.
Claim Denial
An insurer may deny your claim if it realizes that you were lying about the primary driver of the car. Insurers don't just settle claims; they carry out investigations to ensure that they only pay genuine claims. The bigger your claim is, the more thoroughly it will be investigated. This increases the likelihood that your deception will be uncovered when you submit a substantial claim, which will be unfortunate for you since that's when you need your insurance the most.
Coverage Proration
If your claim isn't denied, the auto insurance may prorate your coverage. Coverage proration is a practice that involves the insurer changing an existing policy to reflect the current premiums. For example, if your fronting fraud meant that you were paying a half of what you would pay for your teen as the main driver, the insurer may change your policy and award you only a half of the claim. In the end, you shall not have benefited from your deception.
Prosecution
Auto coverage fronting is fraud, and fraud is a criminal offense. If your insurer doesn't prosecute you, it may do so just because of its leniency or doesn't want the hustle of court cases. However, an insurance carrier looking to weed out fraudsters from its list of clients may choose to sue you for fronting. If you lose the case, you may be punished just like any other criminal, and you will face the consequences that come with having a criminal history.
Difficulty on Buying New Coverage
Lastly, you may also have difficulties obtaining further coverage. Insurers don't like fronting since it costs them money. In fact, even if you do get coverage, it may be way more costly than you would have accessed if your name wasn't associated with fronting.
If you want to get cheap coverage for your child, make sure you do it the legal way. Talk to your insurance agent today for tips on how to lower coverage for your teenager. Contact a business, such as the ESI Insurance Agency for more information.
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