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Travel Insurance Fraud: 10 Things You Should Know

Apr 9, 2008
Contemplating committing fraud is a serious matter, but many people simply don't realise that when they exaggerate a travel insurance claim they are actually committing fraud. While falsifying or exaggerating a travel insurance claim may seem like a harmless 'white lie', travel insurance fraud is a crime.

While it may be tempting to embellish losses, this could lead to serious repercussions. There are now many companies offering cheap travel insurance with good quality cover, so that trying to make back or justify the money lost on unused insurance over a number of holidays doesn't have to be an issue.

Many British people are committing travel insurance fraud without realizing it, and could face serious consequences if they are found out. Here are ten facts everyone should be aware of when claiming money back on their travel insurance.

1) The problem of travel insurance fraud is huge in the UK - 750,000 Britons make false claims on their travel insurance by either falsifying losses or exaggerating how much they have lost.

2) Travel insurance fraud is so common that records from insurers show that Britons lose more Louis Vuitton luggage abroad than is ever actually sold in the UK! However, as a result of this kind of discovery, many insurers are now tightening up their fraud detection methods.

3) Many travellers exaggerate or falsify their travel insurance claims - as many as five per cent of travel insurance claimants add extra items to their reported losses as a way of getting a higher insurance payout and 11 per cent confess to increasing the value of their travel insurance claim.

4) Many travel insurance frauds involve falsified or doctored receipts, which are normally required by insurers as proof of the value of medical costs or lost or stolen goods.

5) The problem of travel insurance fraud affects all travel insurance policyholders, because the extra costs incurred in paying out on false travel insurance claims results in higher premiums on otherwise cheap travel insurance policies to cover those costs.

6) For those that are caught making a false travel insurance claim, the punishment can be severe. Not only will they lose the money they have claimed for, they could also face further financial penalties for their actions.

7) Eighteen to 29 year-olds are by far the worst offenders, with 33 per cent admitting to lying when claiming on their travel insurance, compared with just seven per cent of over 50s.

8) Eighteen per cent of those who commit travel insurance fraud justify their behaviour by saying they are owed the money because they have not claimed travel insurance before.

9) Ten per cent of those who commit travel insurance fraud take the attitude that it's okay, because everyone does it.

10) The majority of travel insurance claims are genuine.

Whilst claiming extras on your travel insurance may be tempting, it's always better to invest in good quality, cheap travel insurance, which won't leave a nasty aftertaste or the potential desire to make back losses with a false travel insurance claim.
About the Author
Patrick Chong is the Managing Director of Journey's Travel. Their commercial travel insurance website, Insuremore, offers cheap travel insurance packages for families, singles, children and skiers with free cover against acts of terrorism and a quick and easy online claims feature.
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