Travel insurance protects travelers. It pays for medical costs abroad. It covers trip cancellations and lost luggage. It gives you peace of mind when plans go wrong.
But fraud weakens that protection for every policyholder.
New Jersey prosecutors charged four people for scheming to file false travel insurance claims and steal more than $200,000 in payouts. They face charges including conspiracy, identity theft, falsifying records, and attempted theft by deception. Some of the stolen amounts were identified in court filings.
Here’s why this matters to you and every traveler:
• Fraud raises insurance costs. Insurance fraud adds hundreds of dollars to the average policy cost each year because insurers spread losses across all customers. Recent estimates show fraud adds roughly $900 to the average policyholder’s annual insurance cost.
• False claims drain resources. Investigating and defending against fraudulent claims increases claims handling costs. Insurers pay for extra staff, technology, and legal work to catch fraudulent activity.
• Fraud undermines trust. Legitimate travelers who buy coverage rely on honest claims. When fraud occurs, carriers tighten scrutiny, slowing payouts for everyone.
• Fraud is widespread. National estimates put total insurance fraud losses in the U.S. at over $300 billion annually. These losses show up in premium bills.
Travel insurance delivers real value to law-abiding citizens. It covers unforeseen medical emergencies, evacuation, trip interruption, and baggage mishaps. Buying a well-structured travel policy gives you financial protection when plans go off track.
False claims hurt your wallet. Here’s how:
• Insurers pass fraud losses back to policyholders in the form of higher premiums.
• More fraud means tougher claim reviews and slower service.
• Fraud increases overall risk in the travel insurance market, pushing carriers to raise rates.
New Jersey authorities deserve credit for pursuing fraud. Their work deters criminal schemes and helps keep insurance affordable for residents. Legal action against fraudsters sends a clear message: fraudulent schemes come with serious consequences and cost law-abiding consumers money.
When fraudsters act, honest travelers pay the price. Strong enforcement and fraud prevention protect your coverage and keep costs down. Buying travel insurance remains a smart choice for anyone who travels.
If you need help understanding Travel Insurance or need to get covered for an upcoming trip, please reach out to Landsman Insurance Services today.