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Insurance claims 'too detailed'

By Bob Howard
BBC Radio 4's Money Box

Insure and Go founder and owner, Perry Wilson
The company asked for proof of ownership of each item in the claim

Travel insurance claims containing "too much information" may be put under extra scrutiny says a leading provider.

Insure and Go says a high amount of detail on low value items lost or stolen can indicate possible fraud.

The company's founder and owner, Perry Wilson, was commenting on a traveller who gave precise details on most of the items he lost in his backpack.

But the Association of British Insurers says giving exact information should not prejudice a travel insurance claim.

What is expected?

Laurence from South West London is claiming just over 1000 from Insure and Go for 39 items, after his backpack, containing mainly clothes, was stolen from a bus station in Peru in April.

In most cases, he was able to detail the price, brand name, whether it was bought with cash or on a card, and the place and month when it was purchased.

No item was valued at more than 100 and he was able to provide a police report of the theft.

Companies have a responsibility to all their customers to... weed out the small number of claims that may be fraudulent
Malcolm Tarling, ABI

When Insure and Go wrote to him after receiving the list, it said it could not cover an item unless he could provide reasonable proof that he owned it or had bought it.

It said it would expect to see a receipt, copy of a receipt, a credit card or a bank statement for each item.

Laurence's mother, Andrea, told BBC Radio 4's Money Box programme she was surprised by the company's reaction:

"I think it would be fairer to say they need receipts for items over a certain amount like cameras."

"We just felt it would be clearer for them to see what the claim was, not make us look suspicious!" she added.

Insurer's doubt

Insure and Go said it has several concerns about Laurence's claim.

I believe travel insurance is just a con
Daniel Batchelor, Westcliff-on-Sea, Essex

One of these was that he had provided unusually complete details of the stolen items.

Perry Wilson, the company's founder and owner, said all insurers have to be vigilant against possible cases of fraud:

"Sometimes people give too much information, that obviously then sparks - why would you remember all 39 items?"

He added: "Give us some meat on the bone to look at this claim, to make sure we have some kind of substantiating evidence for it."

He admitted the firm would normally only need to see evidence for a reasonable cross section of lost items.

Too little or too much

Industry sources said they understood the concept of the "too perfect claim", but in the vast majority of the cases they dealt with they received too little detail.

The Financial Ombudsman Service adjudicates over disputes which cannot otherwise be resolved.

David Cresswell from the service said that whilst claimants must be prepared to be scrutinized, insurers must have evidence of attempted fraud before they can turn down a claim:

"If that comes as a dispute to us, we'd be saying to the insurance company: 'Why would there be fraud in this case, where's the proof of it?'"

The insurance industry as a whole stressed it was imperative that claimants provided as much detail and evidence about their loss as possible.

Malcolm Tarling speaks for the Association of British Insurers (ABI):

"When you lose items on your holidays, the golden rule is to give your insurer full and detailed information."

"Companies have a responsibility to all their customers to make sure they weed out the small number of claims that may be fraudulent," he added.

BBC Radio 4's Money Box was broadcast on Saturday,
24 May 2008 at 1204 BST.

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