Anyone who has ever spent any time in Nepal can tell you that it is an amazing place. The landscapes, history, culture, and people there are wonderful, leaving lasting impressions that will stick with you long after you’ve gone home. But, anyone who has spent any meaningful time there will also tell you that it is a place that is beset with fraud and corruption too. Case in point, last summer it was revealed that an elaborate helicopter rescue scam had cost travelers and insurance companies millions of dollars, with pilots, doctors, trekking guides, travel agents, and others all taking part. Now, months later, the insurance companies that cover travel to the Himalaya are threatening to pull their coverage once again.
The scam works like this: trekkers (and to a lesser extend climbers) traveling in the Himalaya often find themselves not feeling well at altitude. Sometimes it is due to altitude sickness, but more often then not, it is nothing serious. None the less, Nepali trekking guides involved the scam tell the travelers that they should be cautious and go to a clinic just to be safe. The guides say not to worry, the travel insurance companies will cover the costs. So, a helicopter is called in for a “rescue,” the trekker is whisked off to a clinic or hospital, and the doctor there –– who is also in on the scam –– runs a battery of tests, racking up a large bill in the process. The costs for the medial attention and helicopter ride are passed on to the insurance companies, with the payout being split by all involved.
Last summer, when this elaborate scheme was revealed the Nepali government promised to crackdown on everyone involved and would take over operation of the rescue helicopters, eliminating an important step in the process. While that may help cut down on these incidences, some of the travel companies who have paid out hundreds of thousands of dollars in fraudulent claims are wondering why more hasn’t been done. In fact, according to The New York Times article lined to above, there have been no charges pressed against anyone who has been identified as taking part in the scam.
Recently, three large insurance underwriters sent a letter to the Nepali government threatening to pull coverage for travelers to the country. Those underwriters haven’t been identified, but apparently they represent more than 20 insurance companies in total, which have covered 100,000+ visitors to Nepal in recent years. In other words, they could stop covering a significant number of travelers, which could have a major impact on Nepali tourism.
Worse yet, the helicopter rescue scam seems to be continuing. According to the article, from September to December of last year, a prime season for trekking in the Himalaya, about 15% of the 1600 rescues performed over that period were deemed to be fraudulent. They occurred despite new government regulations and oversight. In other words, as is often the case, nothing has really changed in Nepal.
The spring hiking and climbing season in the Himalaya is just around the corner. By April, the business of climbing and trekking around Everest and other major peaks will start to spike up once again. If this situation isn’t resolved by then, the insurance companies could pull their coverage altogether. At the moment, they’re giving the Nepali government time to pull things together, but that process is a long and difficult one to say the least. The bottom line is, if you’re planning to visit Nepal this year, be aware of these challenges and make sure your travel insurance company of choice will cover you while there.
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