With Pounds 50 Million Being Lost to Travel Insurance Cheats Top Firms Launch a Crackdown on Fraud in Sun; Sob Stories of Holiday Thefts May Find Sympathy from Some Quarters, but Travel Insurers Aren't Likely to Be Taken in. ADRIENNE McGILL Reports on the Crack Down on Dodgey Insurance Claims
Byline: Adrienne McGill
LYING in the sun can become a full time occupation for some holiday makers over the summer months - but we're not talking about the supine position here.
If every travel insurance claim for a lost Rolex were genuine, it would be impossible to walk on a Mediterranean beach without crunching a dozen or so expensive watches underfoot.
But "lying" to an insurance company about a stolen or lost item is becoming part of the holiday experience for many Britons.
No one, it would appear, ever buys a cheap watch, ordinary jeans or a basic camera.
No other class of insurance sees policyholders using as much ingenuity in their attempts to secure a payout.
Take the man who claimed for the loss of his Cartier watch which turned out to be a cheap imitation bought for just pounds 3.00.
In another case, a scrap metal merchant claimed pounds 6,000 for Cartier and Rolex watches - on four separate policies.
The insurer spotted the multiple claim (which is itself illegal) and dispatched the police to his home - where they also happened to find a stolen car in the drive.
A skier scuppered his own plans to defraud his insurer by discussing his intentions on the coach taking him to the resort. Unfortunately for him, an employee of his insurance company was sitting just in front, overheard and was able to alert his colleagues back at base.
However, fraudulent claims cost travel insurers pounds 50 million every year and innocent holiday makers are having to pick up the cost of those intent on making false claims.
Premiums are based on the amount of money that the insurers pay out. So the more they have to stump up to meet claims, the higher the premiums charged.
Insurance companies are now cracking down on the cheats and a lot more information is being passed between companies so that they can spot individuals who make regular claims.
But making a claim on an insurance policy is becoming increasingly difficult as insurance companies become ever more zealous in chasing fraudsters.
However, consumer bodies and other informed observers fear that this crackdown on crime is impinging on the rights of genuine claimants as well as those intent on defrauding insurers.
Some have even voiced suspicions that insurers may also be blocking legitimate claims simply to reduce costs and boost their profits.
The Association of British Insurers admits that policyholders have "more hoops to jump through" nowadays if they want to make a claim.
It stands to reason, however, that the more rigorous and arduous this process becomes, the more likely it is that genuine claimants will suffer unfairly.
Anyone who has ever tried to claim a significant amount of money on their household, travel, or motor insurance policy will probably have found it a disheartening experience.
Not only are there endless forms to complete, but the chances are they will also have been visited by a representative of a firm of loss adjusters, appointed by the insurance company to "manage"the claim.
A spokeswoman for the ABI adds: "In the past, insurers took more on trust. But now they want documentation and proof before they start paying claims. If this reduces fraudulent claims, it will obviously reduce the cost of insurance for everyone."
In a bid to help reduce the cost of fraud to the Insurance Industry - estimated at around pounds 650 million per year - Royal & SunAlliance is expanding its network of fraud investigators and piloting new investigation methods.
The Company is the first insurer to set up Fraud Units in the UK (based in Peterborough and Leeds) with support from field-based investigators. By the end of the year, it is hoped the 75-strong team will increase to 90.
Royal & SunAlliance is also piloting a SCORE (Scientific Customer Orientated Risk Evaluation) process, in partnership with Crawfords which further develops the use of the telephone as a fraud investigation tool. …