Holiday sickness: Whiplash rebranded?
One of the hottest stories this summer has been the massive rise in holiday sickness claims. In case you missed it, dodgy claims companies have been contacting tourists – on social media, by cold calling and in person – asking if they have been ill overseas.
If you have been ill, or in most cases if you can fake an illness, you could be entitled to thousands of pounds in compensation, with the claims companies (who even coach people on how to play ill) taking a healthy slice for themselves and their law firm partners.
If it sounds like déjà vu it’s because we’ve been here before. The rise in holiday sickness claims is the bogus whiplash claims epidemic with a rebrand and a fresh coat of paint. It has even been suggested that some of the whiplash claims farmers have now set their sights on holiday sickness.
Anyone who knows about fraudulent whiplash claims, and the damage it has caused the car insurance market, would agree on one thing: the travel sector needs to get a firm grip on the problem before it spirals out of control.
Fraudulent whiplash claims have made a massive impact on car insurance. In fact, the recent rise in the cost of car insurance – where whiplash claims are still a major factor - has shared recent column inches with the news on holiday sickness.
Obviously, the Ogden rate and Insurance Premium Tax have also played a big role in the rise in motor insurance premiums but fraudulent whiplash claims and cash-for-crash scams are picking the pockets of honest motorists.
It is important to remember this because the impact of fake holiday sickness claims on tourists could be just as dramatic, with travel companies – whose margins will be dramatically squeezed if sickness claims continue – having no choice but to hike the cost of holidays.
Those who don’t know the extent of the issue should stop and listen to the Association of British Travel Agents. According to ABTA, holiday sickness claims have increased by 500% in the last three years, with one if its members reporting an astonishing 1000% surge. ABTA also believes that, if the issue is not tackled, some hotels and resorts might even start turning British tourists away.
The million dollar question is how do we stop it? A slow reaction to whiplash saw it grow from a minor opportunistic problem to an organised industry. Thankfully, the Ministry of Justice has already announced plans to tackle holiday sickness but there needs to be a meaningful solution which doesn’t impact genuine claimants.
Just as important is explaining the issue to customers. There is a still a belief that a fraudulent claim is a victimless crime but the real victims are their fellow holidaymakers and motorists who are forced to foot the bill.
Most worrying of all is that fraudulent claims seem to be an overwhelmingly British problem. Other European tourists have not mysteriously developed more sensitive stomachs in the past three years and it has often been said that British tourists have the weakest necks on the continent.
It points to a wider compensation culture on our shores that needs to be tackled head on. If history has taught us anything it is that dodgy claims management companies are always on the look out for soft targets.
This means that making it harder for holidaymakers to submit false sickness claims is just part of the job. The last thing we need is fraudsters moving on to yet another lucrative area, giving their scams yet another rebrand and a fresh coat of paint.
Timely article Amanda- thanks How to combat this? "A central claims database in the industry would be the best way to give a good oversight of the culprits – whether CMCs, rogue doctors or fraudulent claimants – showing time and again, what they’ve claimed for, against whom and when. In addition, using software that can interrogate unstructured data – so, pdfs, emails, videos and so on – the sorts of document formats that will inevitably be used by say, a doctor to submit a sickness assessment, will be key for insurers to fully appreciate everything that is being submitted to support a claim. Effectively, it means the fraudulent claimant will have nowhere to hide. The other critical element is how insurers capture the information from a claim. Our online platform technology would be the perfect way to ensure the evidence supports the claim, through the claimant uploading imagery – text, video or photos – to include robust evidence such as the fact the claimant sought medical advice/diagnosis and the paperwork to go with this, rather than just sending a picture of their paracetamol! Sadly, we are all too aware of how aggressive CMCs are in their marketing to potential claimants and, as there are no fixed costs for Solicitors, as there are for motor claims, it is a profitable way for these companies to make money. The industry is pushing for fixed fees and it’s easy to understand why. However, without a ‘unite and fight’ approach, the insurance industry stands to pay out more claims, in support of a compensation culture that’s out of its control."
Managing Director at Towergate Travel
7 年Many claims are being dealt with after the event. Claims management companies & no win no fee solicitors are challenging Tour Operators under the 1992 EC PTR's. This is seeing a huge hike in claims against the Tour Operators Liability policy. This fundamentally means extra cost on Insurance policies and therefore Increased operating costs. This ultimately means more expensive holidays for the general public as the Tour Operator will pass these additional costs on.
Partner and Location Head at DAC Beachcroft (N.Ireland) LLP
7 年Having ran hundreds of cases to trial over the years, a good step to add into any decision making process is to model the end point of the compensation process, a trial and work backwards. No win at trial for the claimant means no value in the process for the claims company. Without that step the risk is that risk controls are an ineffective spend, either because the control will have little or no impact on a trial or conversely a control might reduce the prospect of a win.
Casualty Technical Director, Sedgwick
7 年Could rewording of the policy be effective. Policyholders must obtain signed report of complaint of sickness to hotel upon onset and obtain appropriate tests at hospital to show which bacteria has caused the illness and sign a discharge allowing insurance company nominated doctor open access to all medical records?
Care Coordination Pathways Manager @ AXA Health | Lean 6 Sigma Green Belt | PSPO 1
7 年How are these customers claiming for these "ailments" under their travel insurance? Surely any insurer would need to see doctors records and invoices, proof of curtailment etc for us to reimburse expenses...? Am I missing something?