Young drivers warned they might not be covered on parents' policy
Young drivers have been warned about taking out insurance on cars in their parents' name, but then being the main driver themselves.
They have been told that the activity amounts to fraud, and is pushing up the cost of premiums.
Thousands of young people are understood to be driving cars that are insured in the names of their parents, but are not driven by the parents.
They do it to save money, as insuring a car in a young, inexperienced driver's name can cost thousands of euro.
Known as 'fronting', Aviva has sent its customers a warning that this is illegal and they may not be covered.
With fronting, the young driver is a named driver on the policy, but the policy is in the parents' name, even though the parents do not use the car.
It comes as the State's competition watchdog said it was probing suspected cartel activity in the industry. Premiums have shot up by almost 70pc in the last three years.
Aviva warned drivers: "Many people involved in fronting do not even realise that what they are doing is not only against the law, but it also puts lives at risk.
"Making a false declaration by saying that someone is an occasional driver as opposed to the main driver of a car is committing fraud. Fraud is against the law and can result in a criminal conviction."
In the leaflet, Aviva said that fraud pushes up the cost of insurance for everyone.
"The increasing levels of fraudulent claims and fronting is one of the driving factors behind the steep rise in motor insurance premiums today," the insurer said.
Drivers who are fronting may not be covered in the event of an accident.
"If these drivers are involved in an accident and insurers investigate and find out that the named driver is actually the main user, the insurance policy will be deemed invalid," Aviva said.
The policy holder may then have to cover the costs of the accident, including vehicle damage and medical bills, as well as the costs of any other parties involved, it stated.
"It may result in a conviction, fine or both the policyholder and the driver of the vehicle could be convicted, fined and potentially banned from driving."
The latest warning comes after a surge in the cost of premiums.
However, the State body that deals with insurance claims, the Injuries Board, told TDs and senators recently it sees no justification for the huge increases in motor premiums that drivers are experiencing.