With the credit crunch hitting us even harder just as we unpack our suitcases, people are going through extreme measures to accumulate a little extra cash. Travel insurance scams have seen an 80% increase recently as the credit crunch develops with holiday makers claiming on items which have not even been stolen or claiming for more than the items actually worth.

Some people have booked holidays but now cannot afford to go on them; you will lose your deposit if you can’t attend your holiday if pre-booked. So people are paying a visit to the doctor and pretending to be ill so they can obtain a sick note, they can then use this sick note to legally get a full refund from the holiday provider.

It is extremely hard to determine a genuine claim as the foreign police are often uninterested in lost or stolen items such as cameras or iPods resulting in low prosecution rates for fraud abroad.

With the number of claims increasing it has forced the insurance companies to act, they now look out for tell tale signs from a claimant and can determine a fraudulent claim much easier now than a genuine claim. They are however, reluctant to release these signs.

If you have a claim rejected, it will be marked on your credit rating and will remain there for three to six years.

This has also forced the insurance companies to bump up their premiums resulting in the honest genuine people paying more whilst the frauds claim the extra cash. You can still save money on travel insurance by shopping around and comparing quotes.

By: Barry Loughran

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A family booked a rental cottage last summer, arrived safely and just loved the cottage. However, on the second day of their two week stay, the mom got a call to say her father was seriously ill and not expected to live. The family packed up and returned home, and sadly, her dad died a few days later. After the funeral, the renter called the cottage owner and asked what sort of refund she could expect as they had only used 2 days of their 14 day booking. The owner refused to pay any refund with the explanation that she relied on the cottage rental income to pay the costs of her cottage and it was always fully booked through the season. She was not able to find a replacement rental party at the last minute and as the rental agreement stated; if that was the case no money would be returned. Of course the rental group did not have travel insurance, which would probably have covered trip curtailment due to the illness and/or death of a close relative. The rental cost the family over $4000 and they were not able to recover a penny of that money.

Many people believe that trip insurance is only necessary if there is a flight involved; where delay, lost baggage, and the risk of the airline going bust, is covered; and medical cover is required in a foreign country. It’s not considered important, or not considered at all, to buy insurance to cover a trip taken by road to a self catering property in the same province or the same country.

Think again! Most cottage bookings are made several months in advance and many things could happen after you have booked to change your circumstances. Illnesses of any member of the traveling party, redundancy or a call to jury service are just a few of the situations that would be covered by a travel insurance policy. A few insurance companies also offer a ‘change of mind’ clause, allowing you to cancel for any reason after a booking has been made and paid in full. This normally pays out an amount sufficient to cover any cancellation fee the rental agency or owner may apply.

When you book your vacation rental property, check the property owners or agencies cancellation policies carefully. If it is not clear, ask the question. In general, most private owners and rental agencies will attempt to rebook a property if it is cancelled, and refund your money for the period they have rebooked, less a cancellation fee.

The premium paid for trip insurance becomes less significant, the more you are paying, however it is worthwhile at any price, for your peace of mind.

By: Heather Bayer

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