Fake insurance claims rise as travellers feel economic pinch

As travellers feel the pinch of the current credit crunch, the number of fraudulent claims on travel insurance policies has soared by as much as 80 per cent, according to insurance company figures.

Insurance firms report that the fraud takes on many forms, including policyholders pretending that expensive items such as cameras and iPods have been stolen, and others who misrepresent the value of an item stolen in an actual case of theft.

Other travellers, realizing they can no longer afford the trip they booked months earlier, are feigning illness and cancelling trips, often finding doctors who will issue certificates that state they are not well enough to travel. Most travel cover features cancellation refunds when a policyholder falls ill before the start of a trip.

The Association of British Insurers reports that its member companies are definitely seeing an increase in fraudulent claims. “Travel insurance is always susceptible to fraud and when times are tough, people look at ways of raising what they believe is easy money,” commented association spokesman, Malcolm Tarling. “Because the losses are abroad and police overseas are often not interested in investigating, people can claim possessions have gone missing.”

He pointed out, however, that claims adjusters are primed to spot the “telltale signs” of false claims, but added: “I won’t say what those are though.”

www.abi.org.uk