Travel insurance fraud results in higher premiums

MANY people don’t realise the
seriousness of travel insurance
fraud, which has spiked
dramatically recently.
Clients who make dishonest
claims are being investigated,
with fines and custodial
sentences reflecting the
gravity of the crime. A British
holidaymaker was recently
sentenced to nine months
in prison after admitting to
four counts of fraud, while
her partner was jailed for 15
months.
Noel Joseph, TIC Claims
manager, says: “Fraud is often
seen as a justified act, even
though the creative recreation
is false or an exaggeration of
the facts.”
TIC head of underwriting, Kim
Waugh, says fraud can range
from a simple inflation of a
claim where somebody has a
bag stolen and it suddenly is
a Louis Vuitton bag and Gucci
sunglasses. Despite what the
public thinks, this is fraud.”
A step up is when the client
creates a fictitious event. “They
did travel and their bag was
not stolen, but they say it was,”
she adds. “Another step up is
that the client creates fictitious
travel details, including an injury
or illness, hospital facilities,
doctors’ reports, invoices and
receipts.”
Sometimes, says Noel, the
staff at a medical facility will
also tamper with invoices,
manipulating the treatment
and costs, to generate a fake
invoice for submission.
Vetting of documentation is
therefore vital and an assessor
will focus on repetition, location
and circumstances for each
claim, he says. “Syndicates are
using this as an income stream
so perpetrators are also found
via third parties. Using existing
forensic expertise both locally
and internationally remains part
and parcel of our assessment
protocol.”
When a client’s explanation
or documentation seems
suspicious, an investigator is
appointed. “They can even
visit the location of the alleged
event to gather facts and
interview the parties involved.
Very often, these investigations
prove that the loss never
occurred,” says Kim.
Simmy Micheli of TIC
cautions against another
kind of fraud. “This is when
travellers buy a travel insurance
policy to get a Schengen visa
and after the visa is issued,
they cancel the policy and
submit ‘proof’ they are not
travelling.”
In some cases travellers
produce false travel insurance
documents and submit these
with their visa applications.
“Embassies that are
suspicious, contact us to verify
and if documents are false,
visas are denied and travellers
are blacklisted from any future
Schengen visa applications.”
Kim says insurers generally
don’t assist each other, but if a
case is proven fraudulent, TIC
will notify other insurers. “Quite
often they discover they have
claims submitted by the same
client!”