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A “dramatic rise” in fraudulent travel sickness claims, particularly in Spain, is costing British insurers millions, it has emerged – and “persuasive” claims management firms may be to blame, according to one expert.
Last year saw the highest costs for travel-related claims in five years, with 480,000 claims adding up to a bill of £370 million for insurers, according to figures from the Association of British Insurers (ABI).
Now, law firm DAC Beachcroft has urged the UK insurance and travel industries, along with their Spanish counterparts, to work together more closely to combat what it described as a “dramatic” increase in fake claims.
Around two years ago, tour operators began to notice a spike in claims being presented against them and the hotels that they work with in Spain, and by last season the claims had risen by five times again, Claire Laver, counter fraud partner at the law firm, told Insurance Business in an interview.
Current regulations for package holidays mean that holiday-goers are able to lodge claims against UK tour operators for travel sickness – more specifically, gastric illnesses – blaming the hotel for negligence in preparing their food.
“’Persuasive’ claims management firms, many of which are already known to law firms through whiplash claims, are now advertising directly to potential claimants,” Laver claimed. “They are now advertising that they deal with travel sickness claims,” she explained, adding that compensation “often covers the cost of the holiday and might possibly pay for the next one.”
Laver said that in her opinion, the spike in claims “isn’t a coincidence.” In a release last week, she commented that “most citizens in the UK would not think of committing insurance fraud,” but said lawyers and claims management companies were “preying on holiday-makers in Spain.”
“They offer them the opportunity, in essence, to recover the cost of their holiday by bringing a false claim for gastric illness,” she claimed.
The ABI is currently investigating the impact of the rise in travel sickness claims on British insurers, and is working to defend these claims “in a more robust way,” according to Laver. DAC too is using its intelligence services to combat bogus claims, and is helping to educate hoteliers in terms of evidence protection, evidence gathering, record keeping and timely provision of evidence, she said.
