Tips to Avoid Fraudulent Travel Insurance Providers

Friday, June 13, 2014

travel insuranceHoliday accidents can be incredibly expensive. Imagine the cost involved if you are in a car accident and you have to pay for the medical treatment and the evacuation out of your own pocket. This is why travel insurance makes sense, but only if you can avoid fraudulent providers.

  • If you buy insurance from Travel agents, you do not know what deal those agents have with the insurers whose services they sell. Ask your travel agent for as much information about the insurer as possible and research their financial standing before you commit. Find this information at rating agencies like Standard & Poor’s, A.M. Best and DBRS Limited.

  • Avoid buying a policy from individual brokers or agents who walk around and sell in airport lounges, pubs and outside travel agencies. It is easy for anyone to acquire policy documents from insurance companies, to modify them and to sell them to unsuspecting consumers. These are known as ghost brokers.

  • When you buy a policy, ask who the underwriter is for the company that sells it. The most credible policies will have an underwriter that is legally regulated and financially healthy. Such companies are federally regulated by the Office of the Superintendent for Financial Institutions and provincially by the Canadian Council of Insurance Regulators. Contact these organisations if you are unsure.

  • As painful as it may be, read all the fine print. Fraudulent insurers can easily sell you a contract that looks legitimate, but that has clauses to absolve themselves of having to pay out in a wide variety of circumstances.

  • Avoid companies that request wire payments through, for example, Western Union. These are not traceable. Insist on paying your premium with your credit card or through a service like PayPal, who have in-house consumer protection programs and fraud investigation services.

Enjoy your holiday with the peace of mind that, should something go wrong, you will be covered by a credible insurance policy.