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Will travel insurance protect you from travel scammers?

Many would-be travellers who've been duped by holiday scammers are wondering if their travel insurance will cover their losses. But that's not what travel insurance is there for.
Will travel insurance protect you from travel scammers?

South Africa’s tourism industry is opening up again. Data from comparison platform shows a 174% increase in traffic to its online travel insurance quote comparison platform between January/February 2021 and the same period this year. But swindlers are everywhere – as travellers are finding to their cost.

In South Africa, hundreds of criminal cases have been opened against the so-called Holiday Swindler, who took millions of rands in five-star holiday bookings, only to allegedly abscond with the money. On a smaller scale, a guest house in Cape Town is now warning potential guests about a fake Facebook page that allegedly scams victims with fake banking details and fraudulent bookings for the establishment.

“Scams and schemes like these are nothing new,” says CEO Bradley du Chenne. “But after two years of lockdown, South Africans want to start travelling again – and that makes them prime targets for travel scammers. Add that to the widespread confusion around travel insurance claims related to Covid-19 travel restrictions and cancellations, and it’s creating a lot of noise – and, sadly, a degree of mistrust – in an already-strained travel industry. compares holiday packages and accommodation options across South Africa and internationally, so you can believe us when we say: if a travel deal seems too good to be true, then it probably is.”

Fraud is a criminal matter, and if you’ve been duped your best legal recourse is to open a criminal case against the alleged scammers. Travel insurance is unlikely to help, simply because that’s not what travel insurance is there for.

As Heinrich Brand, COO of Hepstar Travel Insurance, warns: “Although there may be an insurable risk related to travel supply fraud, this has not found its way into most (if any) travel insurance plans. Insurers would likely argue that the onus and duty of care of ensuring authenticity and credibility of a travel supplier cannot be passed by a customer onto the insurer. Traditional cancellation cover would not apply as the underlying cause for cancelling is fraud, not a customer’s inability to travel. The insurer would require confirmation of irrecoverable expenses from the supplier – which you’re unlikely to get from a fraudster. Vigilance and education in the signs and avoidance of fraudulent operations are therefore required to avoid losses of this nature. Paying by credit card also allows the customer to attempt a chargeback.”

No kidding. But travel insurance isn’t meant to protect you against shady deals; it’s there to provide cover for unforeseen events, like if you need to cancel your trip or become ill while on holiday. “Travel insurance does not cover cancellations by the airline,” Brand adds. “This would need to be compensated for by the airline.”

That said, travel insurance providers offer different benefits and features, which is why it is advisable to compare quotes before making a purchasing decision, but also to do so immediately after booking your flights. As Brand explains, “Not all insurers cover cancellation for subjective reasons not specified. Eligibility for this benefit may also be conditional upon purchasing near the travel booking date. What’s more, not all plans include pre-existing medical conditions; there are often claim limits on individual baggage items and conditions regarding where certain items need to be stored or transported for them to be covered.”

However, most travel insurance will cover you for unexpected medical expenses, trip cancellations, loss of important documents, lost baggage, and delayed flights – with various types of cover available depending on the traveller’s needs.

If you’re planning a holiday, be sure to make your bookings and travel arrangements through a reputable agency; and remember to take out travel insurance. It won’t protect you from scammers, but it will cover you for unforeseen events while you’re away from home.

*This article does not constitute advice.

23 Mar 2022 15:58