3 Problems That Can Arise From Lying On Your Travel Insurance Application
There are lots of points while filling out a travel insurance application where one might be tempted to stretch the truth a little bit—or perhaps even fabricate personal information altogether. Prices for premiums are formulated based on such information, so there would certainly seem to be a financial incentive for people to make theirs seem more appealing.
But in reality, that incentive is far outweighed by the consequences of lying on an application. Want to save money on travel insurance? Do it legitimately, don't resort to lying. Because if you do, you could quickly find yourself in one of the following messes.
Being Denied Coverage
Imagine you're a middle-aged Canadian visiting family in Florida over the holidays. You bought travel insurance, but decided to cut some corners on the application, lying about several seemingly unimportant details—including the fact that you smoke. Just over a week into the trip, after several days of overindulging on food, drinks, and cigarettes, you suffer a stroke. You are rushed to the hospital and receive the treatment you need.
While you are in recovery, a family member has gotten in touch with your travel insurer and made a claim. All appears to be going smoothly, until, that is, the insurer catches wind of the fact that its client was a smoker, a habit that seems to have contributed to the stroke, according to the medical reports. Based on the policy's fine print, this gives the insurer the power to void all coverage..
This is one of the very real dangers of lying on an application. Even if this particular situation feels a little extreme, the basic sequence of events can and will happen for all sorts of related scenarios. Travel insurance companies don't want to be taken advantage of, so they will do their homework every time a claim is filed. When they do find something fishy, they will not hesitate to deny coverage.
Paying out of Pocket
If "Being denied coverage" was Consequence 1a, consider this to be Consequence 1b. Without the security of emergency medical coverage to fall back on, travelers who require medical attention are left paying out of pocket—a pill that can end up being pretty hard to swallow.
On top of the sting of suffering any sort of serious injury in the first place, untruthful policyholders may have to foot medical bills that could end up rising into the hundreds of thousands of dollars. There is no sense in leaving yourself exposed to that possibility.
Insurance Fraud Charges
This is by far the most serious of all the consequences that arise from travel insurance lies. Not only will it result in revoked coverage or a spot on that company's blacklist, it could lead to criminal charges and an industry-wide blacklisting.
What separates insurance fraud from general 'lying' is that it is usually done with the intention of making money out of the whole process. Whereas the stroke example from the first section was an unintended event that ended up revealing a lie, insurance fraud is a calculated crime that is done with the purpose of extracting money that comes at no cost to the policyholder (i.e. not having to go through medical trauma).
More often than not, travel insurance fraud is perpetrated through shady theft claims, but it has also been known to be tied to the application itself. For example, if someone presents the cost of their trip to be far greater than it actually is, and then tries to cash in on cancellation fees, that would certainly qualify.