Parental Education on Insurance Fraud
Kevin Perkins
|14 July 2025
Educating parents on the risks of insurance fraud is crucial to safeguarding their financial future and setting a strong ethical example for their children.
As a parent myself, I am acutely aware that our children’s understanding of the world, including ethical boundaries and financial responsibilities is largely shaped by the behaviour and actions of their primary caregivers. Early exposure to discussions about right and wrong, honesty and the consequences of bad behaviour lay the groundwork for their future decision-making.
In the context of insurance fraud, parental education can serve a number of functions and help to equip the younger generation with the tools needed to avoid falling foul of those unscrupulous individuals who seek to deceive them. This may involve breaking down insurance concepts into understandable terms and explaining the principle of fraud and its consequences.
However, there is an educational need for parents themselves.
In a desire to reduce costs for their children, particularly in a cost of living crisis, they may find themselves unwittingly partaking in insurance fraud. A prime example is "fronting", a common practice where an older, more experienced driver (typically parent) declares themselves as the main policyholder for a vehicle primarily driven by a younger, higher-risk driver.
While seeming like a harmless way to lower premiums, fronting constitutes insurance fraud; the policy is being taken out via fraudulent misrepresentation.
For parents caught fronting, the penalties can be severe; in the event of an accident and subsequent claim, the insurer can invalidate the policy, leaving the parent and child without cover and potentially liable for significant damages which may ultimately impact several generation's lives.
Insurance brokers, in my view have a vital service to play in this space. As intermediaries between insurers and their policyholders, they are often the first point of contact for individuals seeking cover and possess a unique opportunity to educate and guide their clients.
For brokers, understanding, identifying and ultimately calling out red flags for fraud is crucial. Their role extends beyond merely selling policies; it ought to encompass proactively informing clients, especially parents, about what constitutes insurance fraud and the serious consequences that it entails.
Education is the key and it may be that insurers should be actively encouraged to enter into initiatives to provide informative sessions to those who may be of the age where they, or their children, are about to buy their first policies. Such sessions should outline the issues the modern driver faces, not just in relation to fronting but also in respect of the likes of ghost broking, which, you don't need me to tell you, is on the rise.
