Low cover is no cover in brokers' rogue trick

Unscrupulous online car insurance brokers are offering people a new way to cut the cost of cover – but in the process they're leaving them uninsured and at risk of criminal charges.

It's a simple – but potentially disastrous – trick. If you live in a high-risk area your premiums can be massive. But registering your policy at a different address can mean a potential saving of hundreds of pounds because most insurers use post-code pricing.

But the trick involves breaking the law and those suggesting it are likely to be fraudsters rather then genuine insurance brokers.

It's a similar wrangle to fronting – when a parent's name is put on the policy of a vehicle that is only driven by their child. But both are fraud.

If you don't ever have an accident it's possible you may get away with it. But if you are involved in a prang, your claim will be turned down, which could leave you thousands of pounds out of pocket and face a police probe.

"If the police suspect that the customer was aware of or involved in the fraud, they have been known to seize vehicles and arrest them for fraud," warns Emma Banks of insurer LV=.

Insurers are also getting wise to the postcode trick as brokers tend to use the same contact details for multiple customers.

Instead of risking breaking the law, you can choose other ways to cut your motor cover costs, such as by taking a bigger excess – or even switching to a smaller car!