Travel insurers fear increase in false claims

Travel insurers are preparing for a wave of fraudulent claims by financially-strapped holidaymakers.

Travel Insurance News - 11/08/2008

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Experts are predicting an increase in the number of dubious insurance claims by travellers trying to offset the cost of their summer holidays by “losing” expensive items that are covered by their travel insurance, or by inflating the actual costs of their losses when they do occur.

Insurers are already witnessing this trend in the motor vehicle insurance area, which has experienced an increase of 13 per cent in suspicious claims during the past few months, reported Absolute Fraud Management, a fraud detection firm. It is anticipating similar increases with holiday cover claims.

One of the biggest increases expected is in claims for trip “cancellation” when travelers realise how much their two weeks in Las Vegas is really going to cost, compared to what they anticipated when they booked the holiday some months earlier. It is also expecting additional claims on the loss of small items, previously ignored by policyholders.

“There will be in an increase in fraudulent claims as the recession bites,” noted insurance industry advisor Steve Manton of M Consulting. A spokesman for the CEGA Group, which handles policyholder claims for several large insurers added: “With the economy going the way it is, people might claim for smaller losses when, otherwise, they might not have bothered.”

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