Travel Insurance Companies May Soon Drop Coverage of Travelers in Nepal

Remember the story I shared last week about the “fake rescue” scam that had grown into a significant problem in Nepal? Essentially, trekking companies were working with helicopter operators and hospitals to evacuate clients who weren’t necessarily in need of a rescue. They would then be taken to a medical facility, where doctors would run a battery of unnecessary medical tests on them, running up a hefty bill in the process. That bill would eventually be handed over to the adventure travel insurance companies to pay the tab, often costing thousands or even tens of thousands of dollars. The scam mostly impacted trekkers visiting the Himalayan country and not mountaineers, but has apparently gotten so bad that a government probe was forced to step in to prevent the widespread fraud from continuing. Now, it seems the insurance companies are none too happy about the situation and are also threatening to take action.

The Himalayan News is reporting that sources have told them that representatives of the insurance industry have set down an ultimatum for the Nepali government. It seems officials have a deadline of September 1 to sort out this issue or the travel insurance companies have threatened to drop coverage of visitors to Nepal. According to the article, an alliance of insurance companies from Britain, Australia, and New Zealand are at the forefront of this movement, but you can bet others are likely to join in soon.

Apparently, the insurance companies have lost so much money to this scam over the past two years that recouping their losses is already a major challenge. The Himalayan News says that the scam has gotten so lucrative that even small trekking companies are taking part. It has even gotten to the point that trekkers joke about how easy it is to get a lift back to Kathmandu by helicopter, with the insurance companies paying for the flight.

To that end, the insurance providers are requesting that all “rescues” now get approval ahead of time with costs being capped at $4000 per flight. Other changes are apparently coming, as The Himalayan Times also reports that police-led search and rescue teams are now being proposed, taking the private sector out of these operations altogether. That would bring some much-needed supervision to these proceedings, although with corruption being so rampant, it isn’t hard to see why so many people are skeptical about any solutions being proposed right now.

The bottom line is that if you’re planning to go to Nepal in the near future, be sure that your travel insurance is paid up and continues to offer coverage. This could become an even bigger story before its all sorted out. And with a new trekking and climbing season about to begin, it’s good to know where you stand.