There are many factors that are affecting the travel insurance industry at the moment, from an increase in fake claims to the economy itself.

Fraudulent travel insurance claims from customers could be increasing as a result of the credit crunch, experts have warned.

Fraudulent travel claims have increased by 80% it has been revealed. Many customers are reportedly pretending that personal belongings such as iPods and cameras have been stolen overseas, whilst other customers are increasing the value of an item that has been stolen.

The Association of British Insures stated that its members have defiantly witnessed a rise in fraud: “People look at ways of raising what they believe is easy money.” However, there is a low number of prosecutions for this crime, as it is very difficult to prove.

In contradiction to this, there are concerns that teenagers who will go on their first parent free holiday uninsured. Around 100,000 teenagers will not have insurance when they go off on their summer break.

It has been exposed that a concerning high proportion of the 500,000 youngsters who are going on their trips will not be covered, whilst others might be invalidating the insurance they take out through their own irresponsible behaviour.

An example of this is that 45% of teens are thought to drink too much on their first unsupervised holiday. It was also stated that 1,500 Britons are arrested in Spain due to dangerous behaviour which could also lead to a serious accident.

It has been stated : “Your first parent-free holiday can be a great experience, but because of their age and new found freedom, fledgling holiday makers can be one of the most at risk groups. We are encouraging teens to be prepared and stay safe so their holiday can be one to remember for all the right reasons.”

It is estimated that around 20% of all Britons who go on holiday do not take out travel insurance cover before they jet off.

Most recently the credit crunch has seriously provided a huge knock back for travel insurance companies. Currently it was revealed that the UK’s third biggest package holiday group ceased to trade.

The fact is that such companies are especially vulnerable in times of recession. When the public feel the economic strain, as they are the present moment, holidays tend to take a back seat. With added pressures from fuel prices rocketing sky high and the freezing up of global credit markets have all contributed to the demise of travel companies.

With hundreds of travellers now stranded due to the implosion of the travel company, people are waiting with baited breath to receive help from the government, and whether their insurance scheme governing the sector can sufficiently protect those customers who booked in good faith in the soundness of the company.

If the insurance regulation of a sector in the travel industry is too light, then customers end up being financially penalised when business fail. However, if commercial insurance schemes are too expensive, then customers cannot afford this type of travel insurance, so end up with less choice.