subject: Travel Insurance Fraud - What's Is It? [print this page] Travel insurance fraud occurs when a person makes a false claim on their insurance policy. An example may be where a claim is made for bags allegedly stolen by a person or persons unknown.
The Australian Institute of Criminology states that 20% of travel insurance claims are fraudulent, which means that insurance companies face an ever-increasing battle to maintain premiums at an affordable level whilst at the same time offering adequate coverage for their clients.
Travel insurance gives people the peace of mind they need especially when they are holidaying overseas. The policy will cover things such as lost luggage, which is similar to a home contents insurance, and may even extend to accidental death or injury. The premium will be determined by the geographical location to which you are travelling and the nature of your holiday will also be a consideration.
If you intend to engage in any extreme sports or similar adventures, you might find the insurance company adding some exclusions to the policy or else charging you an extra premium. In most cases you will be able to get coverage for the things most likely to occur during a holiday. Things like any financial losses you might experience if your holiday is delayed or cancelled due to unforeseen circumstances.
You can also obtain cover for the expenses you incur if you are delayed or have your flights cancelled. Naturally, if you have your money or passport stolen you'll be covered for the expenses involved in obtaining replacements.
As far as medical insurance goes if you are injured in an accident or simply become ill and cannot complete your journey, a good insurance policy will cover medical and hospital costs you incur.
If you are involved in an accident which causes damage to other people or their possessions, they will generally be a personal liability cover in your policy along with the legal expenses that may be incurred in pursuing your claim.
You can imagine that with the range of events covered by a holiday insurance policy, there is enormous opportunity for unscrupulous policyholders to perpetrate fraud. If you are travelling to dangerous destinations you run the risk of theft, but it is very tempting for some people to claim a loss when it has not actually occurred.
Insurance companies have difficulty establishing the accuracy of a claim in these circumstances so it is not surprising that the premiums they charge for travelling to such places is a little higher than normal.
The most common occurrences of travel insurance fraud is in the field of money and passport theft. Although the Australian government can follow-up the details of passport theft, an insurance company will sometimes have to rely upon the honesty of the policyholder. You can imagine the difficulties in following up police investigations of a theft occurring in a Third World country.
Travel insurance policies provide a safety net for all travellers and we have a moral obligation to remain honest in our dealings with insurance companies that provide these policies for us. The losses that are incurred through fraudulent claims are passed on to the consumer in the form of increased premiums, so eventually everyone is a loser
by: Mark James
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