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Travel Insurance Fraud

Insurance coverage is intended to protect us from uncertainty — we have health insurance to cover unexpected medical costs and needs, life insurance to provide our loved ones with financial support once we die, car insurance to cover accident costs, and so on. Insurance coverage is protection against the issues we can’t plan for in life. That would lead you to expect that when you travel, you can protect your expenses and your trip details from unknown factors like weather, sickness, or major world events that may prevent you from completing your trip as planned. However, purchasing travel insurance rarely pays off and can even end up costing you more than your trip.

Insurance providers often target people who buy expensive trips — cruises, round-trip flights to exotic destinations, or travel packages that include transportation and hotel rooms. These trips often cost a substantial amount of money upfront and usually have to be booked in advance, so insurers have a high probability of making a profit either way.

What Does Travel Insurance Cover? 

Travel insurance is supposed to provide coverage in many different situations. Some of the common types of insurance policies marketed to travelers include:

  • Trip cancellation insurance
  • Insurance to provide coverage in case of rental car damage
  • Coverage in case of accidents while on a trip
  • Insurance that provides help coordinating medical, legal, and travel assistance services
  • Insurance that reimburses you for lost luggage
  • Trip delay coverage

No matter what type of travel insurance you purchase, you have the right to expect that the policy will pay out when a covered event occurs. Unfortunately, this fails to happen in many situations. Travel insurers are notorious for taking premiums and finding excuses to deny claims or pay out less than policyholders should receive. You’ll be out your premiums and the value of your losses if your insurer does not pay, so you should consult with a California travel insurance fraud attorney if you are victimized.

While seniors are a common target for travel insurance scams because many seniors have health concerns that could affect their trips, anyone of any age could be vulnerable to fraud by an insurer and could take legal action to get help when a policy does not pay.

How Cancelled Trip Insurance Works

Suppose you’re booked for your dream vacation: warm sands, pina coladas, ukulele music, and the crashing surf. Then suppose you break your leg. Canceled trip insurance is supposed to provide some measure of recompense for missing out on the Big Island. But you, instead, spend your week of recuperation fighting to get your policy paid out.

Travel insurers are notoriously bad about paying their dues and seem content to let customers suffer. They have even been known to tell customers that some medical problems aren’t serious enough to warrant canceling a trip. Sometimes, they limit themselves to only paying out a small portion of what a traveler claims. Either way, the agency makes off with the premium and does not provide the extensive protection promised to their clients.

For this reason, trip cancellation protection is not always the best option, especially if you are purchasing it through a third party. The agency or company offering the policy could be promising a great deal or a value price, but in reality, it may be charging more than is necessary for your protection and pocketing the excess.

Policy providers may also exaggerate or lie about the scope of the protection you have purchased. For example, if you purchase full trip protection at a set price for your flight, hotel room, and rental car, but then only receive half your reimbursement or a smaller amount on your refund, you could be a victim of fraud, swindled by hidden fees or charges that were not disclosed upfront.

Travel Insurance Fraud Scams

Some of the popular providers of travel insurance policies include:

  • AIG
  • American Express
  • APRIL Group
  • Atlas
  • AXA Assistance
  • CSA Travel Protection
  • Global Alert
  • HCC
  • HTH Worldwide
  • IMT Services
  • InsureandGo
  • InsureAssist
  • John Hancock
  • MH Ross
  • Nationwide
  • RoamRight
  • RSA
  • Seven Corners
  • TravCan
  • Travel Insurance Coordinators (TIC)
  • Travel Insured
  • Travelex
  • TravelGuard
  • TravelSafe

Not every policy from every company is a fraudulent one, and some travel insurers do actually pay claims as promised. A great many insurers, however, have a bad reputation for not paying for covered claims when policyholders have purchased coverage.

Many travel insurance providers will convince travel agents or trusted sellers of trips and excursions to get buyers to purchase insurance policies. The average commission for selling a travel insurance policy can start at around 40 percent and can go up from there; so, there is tremendous incentive to heavily market these policies.

Some travel agents are also concerned that they could end up being liable if something goes wrong. That said, they try to convince you to buy a travel insurance policy so you are covered by the insurer instead of going after the agent. Travel agents may not be aware that the policies they market and sell won’t payout and they don’t know that they may be convincing consumers to buy into scams. 

How Travel Insurance Fraud Occurs 

Travel insurance fraudsters are crafty and are constantly devising clever new schemes to separate their victims from their hard-earned money. After all, they must innovate to continue their trade — once a particular scam becomes well-known enough, the pool of potential victims shrinks, forcing them to come up with new ways to bring in even more victims. While their methods change, most types of travel insurance fraud fall into one or more of the following categories: 

  • Fake travel insurance companies: Fraudsters often project a veneer of legitimacy, even going so far as to spoof legitimate companies, especially companies the target has heard of and is likely to trust. These fictitious companies may have slick-looking websites and real phone numbers and addresses that can further trick their victims. 
  • Fake travel agents: In many cases, unscrupulous individuals impersonate legitimate travel agents for the purpose of selling fictitious travel insurance companies to their victims. 
  • Ghost-broking: Similar to fake travel insurance companies and fake travel agents, “ghost-broking” involves the sale of forged or invalid travel insurance policies to consumers.
  • Tricky terms in fine print: Even if a travel insurance policy is otherwise legitimate, it may nonetheless contain fine print that excludes major types of claims and other “gotcha” clauses that can render the policy worthless. 
  • Unsolicited offers: Many travel insurance scams are perpetrated by making unsolicited offers to individuals the fraudster thinks will be an easy target. Seniors are a particularly common target, and travel insurance fraud against seniors may be considered a form of financial elder abuse

These are just a few of the many ways travel insurance fraud can occur. If you believe that you have been a victim of travel insurance fraud, please contact a California travel insurance fraud lawyer

COVID-19 and Travel Insurance Fraud

The COVID-19 pandemic has increased opportunities for the perpetrators of travel insurance fraud to take advantage of their victims. Due to unpredictable lockdowns, shifting vaccination requirements, and mandatory quarantine periods, the COVID-19 pandemic has made travel more uncertain than ever, with many individuals turning to travel insurance policies to help cover some of the risks of a canceled trip. Unfortunately, losses caused due to pandemics are not normally covered under standard travel insurance policies. Even if a policy contains a “cancel for any reason” (CFAR) clause, those clauses usually have strict limitations on when and how policyholders can use them and typically do not cover 100% of their trips. 

How to Avoid Travel Insurance Scams 

Potential victims of travel insurance fraud and scams can take the first step toward protecting themselves against travel insurance fraud by keeping the following in mind: 

  • Only purchase travel insurance through a reputable travel insurance company
  • If the policy sounds too good to be true, it probably is
  • Beware of high-pressure sales tactics
  • Beware of travel insurance policies that purport to cover COVID-19-related losses
  • If you are a senior, you are at a greater risk of being targeted for travel insurance fraud

Call the Evans Law Firm

Recently, the Evans Law Firm, Inc. has launched investigations into several potentially fraudulent travel insurance policies on behalf of their clients. For more information about how to protect yourself from travel insurance fraud and other forms of financial elder abuse, please contact a California travel insurance fraud lawyer. 415-441-8669, or by email at

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