The cost of all-inclusive holidays could rise by 15% for UK holidaymakers if the surge in false holiday sickness claims continues, insurers warn.
Abta says the rise in gastric illness claims are up by more than 500% across the industry while lawyers have warned that Spanish hoteliers are considering stopping selling all-inclusive packages to the UK market.
Phil Carr, director of sales at ROCK Insurance, said: “The travel and tourism market has seen a large increase in all-inclusive holidays in recent years, with issues like Brexit playing a significant role in UK holidaymakers looking for sustainable budget holidays, as the cost of traveling abroad continues to rise.
“However, along with this boom in the budget sector has come a growing trend in fraudulent claims against all-inclusive holiday providers, specifically claims for gastric-type illnesses, such as food poisoning, as holidaymakers try to claim back money on their travels.
“Costs can vary but fraudulent claims typically account for 15 – 18% of the insurance premium, and increases in fraudulent claims against hoteliers will have to eventually be cascaded down to the consumer. As a result, a family of four could potentially be looking at an all-inclusive holiday price increase of 10-15% annually.”
Carr said that fraudulent sickness claims are “very difficult to prove” and hoteliers and insurance providers have tended to make payments when customers have medical advice and a prescription.
“However,” he added. “The true cost of these medical claims can vary significantly and the sheer scale of claims will undoubtedly have an adverse impact on claim inflation moving forward.
“Some hoteliers in Spain have even suggested this growing trend has cost their industry over £40m in the last 18 months, and the impact on the travel insurance industry is likely to be similar.
“If this trend continues, not only will it impact the claims of the genuinely ill holidaymaker but we could potentially see the travel sector having to increase costs further.”