Thinking about fronting? read this first....

PapaLazaru said:
What are you comparing the general cost of motor insurance to?
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The incredible risk with which they present themselves by accepting all third party liability costs even on the most ridiculous of cars, against the comparatively trivial premiums charged.
 
Jez said:
The incredible risk with which they present themselves by accepting all third party liability costs even on the most ridiculous of cars, against the comparatively trivial premiums charged.
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Yes, but those costs work both ways. An insurer is not always going to be paying out. They get paid in equal measure.
 
Insurer's measure their profitability based on a combined ratio.

That is the money paid out in claims divided by the premiums received.

Anything under 100% and they make an underwriting profit, anything over and they make an underwriting loss.

Swiftcover are seen as star performers at the moment and have a ratio of 100.1% last time I heard. So for every £100 in premiums they pay out £100.10 in claims.

Their profit comes purely from the investments they make while they are holding the premiums.
 
Muncher said:
Insurer's measure their profitability based on a combined ratio.

That is the money paid out in claims divided by the premiums received.

Anything under 100% and they make an underwriting profit, anything over and they make an underwriting loss.

Swiftcover are seen as star performers at the moment and have a ratio of 100.1% last time I heard. So for every £100 in premiums they pay out £100.10 in claims.

Their profit comes purely from the investments they make while they are holding the premiums.
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Interesting, never thought about them using the money at the time for investments. I'm with Swiftcover and they were by far the cheapest.
 
Five_Star said:
Should I be concerned

  • I bought the car on finance as I had a better credit score and got a better rate.
  • The car is registered on the v5 in her name
  • She is the main driver and am a named driver
  • She drives it everyday to work, I get to drive on the weekends

Would this cause an issue if we had to claim? I essentially pay for the car and dive it occasionally but I don't have my own insurance for it.
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You have no cause to be concerned as far as I can tell.

When you took out the policy were you asked if the Main driver (your Mrs) was the registered keeper of the car?
The difference here is that she IS the car's registered keeper. So you have not lied or mistakenly misled the insurance company.

If in doubt, check with the insurance company. Far better to find out now if there is a problem than when and if they is a huge claim hanging over you!
 
Presumably the profits insurance companies make, like banks, are in investments made using the liquid capital made from people paying their premiums? When you consider what insurance companies charge relative to what they have to pay out, I can't see how it could possibly be sustainable if they didn't play the markets with customers money?
 
Thanks Malt_Vinegar, to be honest I've let her sort the insurance, it wasn't something that occurred to me that the owner of the vehicle finance should be the main driver. I guess as you said it doesn't matter as long as the car is in her name.

The pain is that I'll have to get her to ring the insurance up and check as I'm not allowed to check her policy (insurance company rules for data protection blah blah blah) and she'll think I'm worrying about nothing
 
wesley said:
So what is fronting then?
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Fronting is driving a car as a named driver when you are the main driver of the car.

For example:
18 year old buys a group 15 car. He struggles to insure it in his name.
He then gets his 50 year old dad to insure the car in his name as the main driver, and adds his 18year old son as a named second driver.

18 year old then drives about in a group 15 car, dad never drives the car.

The insurance company have set the premium on the older driver with occasional access to the 18 year old. However, the 18 year old is driving it around all the time. This means he is Fronting his policy, getting a cheap deal whilst upping the risk the insurance company is exposed to.
 
Malt_Vinegar said:
Fronting is driving a car as a named driver when you are the main driver of the car.

For example:
18 year old buys a group 15 car. He struggles to insure it in his name.
He then gets his 50 year old dad to insure the car in his name as the main driver, and adds his 18year old son as a named second driver.

18 year old then drives about in a group 15 car, dad never drives the car.

The insurance company have set the premium on the older driver with occasional access to the 18 year old. However, the 18 year old is driving it around all the time. This means he is Fronting his policy, getting a cheap deal whilst upping the risk the insurance company is exposed to.
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My gf drove her mum's micra for first 2 years as second driver, her mum was the main driver and owner of the car but never drove the micra as she got another car.

Recently her mum changed the ownership on V5 to my gf and gf is now main driver on insurance. Does that means first 2 years the insurance was invlaid?
 
wesley said:
My gf drove her mum's micra for first 2 years as second driver, her mum was the main driver and owner of the car but never drove the micra as she got another car.

Recently her mum changed the ownership on V5 to my gf and gf is now main driver on insurance. Does that means first 2 years the insurance was invlaid?
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Pretty much. She could have been in trouble if she had to make a claim.
 
peterattheboro said:
He shouldn't of bought the car in the first place.

If he's taken out finance for £30k+ and he can't afford to be insured fully comp then epic fail on his part.
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Hence why it was up for sale?

No-one seems to have asked why a 9 month old 3-series was up for sale (which had over 4 years finance remaining on it). An HPI check would have revealed this and probably scared off any prospective buyer...
 
I saw bankrupcy mentioned in that thread...
Anyone think this might actually be an option for the bloke?

Looks like he was struggling to make payments (selling after 9 months) and now has nothing to show for it due to insurance issues...

is 30k enough to warrent such a decision?
 
Malt_Vinegar said:
I saw bankrupcy mentioned in that thread...
Anyone think this might actually be an option for the bloke?

Looks like he was struggling to make payments (selling after 9 months) and now has nothing to show for it due to insurance issues...

is 30k enough to warrent such a decision?
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Not unless he has a load of other debts.
 
MagicBoy said:
Hence why it was up for sale?

No-one seems to have asked why a 9 month old 3-series was up for sale (which had over 4 years finance remaining on it). An HPI check would have revealed this and probably scared off any prospective buyer...
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I have mentioned this previously but anyways.

The more I think about this the guy in the story is just amazingly stupid or he is trying to pull a fast one.

The car was for sale as he was struggling to make payments.
He would have still owed loads of finance on that car once sold.
He was fronting his policy.

Would he have been so stupid a to get someone he knows to 'steal' the car?

It could have worked, but I bet he has not even got a gap policy on the car in the first place to cover the finance that would still be owing.

If his old man has retired early, he should be in a good financial position to help out as well no?
 
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