What is car insurance fronting?

Car insurance fronting is the practice of adding another person to an existing insurance policy for the purposes of providing insurance company for the added person at lower rates than the person would receive on their own policy. Insurance fronting is typically used by parents to provide insurance insurance for their teen or young adult children. While this practice is similar to simply adding a child to an auto insurance policy, it is actually significantly different and is a form of insurance fraud.

When the parent uses car insurance fronting, they claim the insured vehicle as their own and are listed as the primary driver even though the insured person is the true owner and primary driver. By doing so, the newly added person is able to take advantage of the greater experience and perhaps better driving history, bypassing the risk statistics for that person's own driving history and age group.

Legally, the parent can add a dependent offspring to their own policy, so long as the insured vehicles are the property of the parent and the parent is the actual primary driver. Fraud occurs, for example, when the offspring owns the car outright and either drives the vehicle exclusively or as the sole primary driver. This causes the insurance company to insure a higher risk driver for the same amount as a low risk driver and results in a high degree of losses to the insurance company, essentially duping the insurance provider into taking responsibility for more risk than the policy would otherwise be written to cover.