We are now developing the hotel protection product to an online travel agency, we want to insure the hotel reservation deposit if the insured cannot check in the hotel due to the covered reason, such as accident or severe injury to the insured, the bad weather or the terrorism, the new job offer or new job arrangement and etc.. And we want to charge the premium at the percentage (such as 5%) of the room rate. However, here is a risk that seems we have to consider.
That is the travel agency may use this protection to get benefit of the unsold rooms. For example, the room is normal $100 per night, the agency could mark the room price on its website at $250, if the agency cannot sell the room, the agency may authorize its one employee to purchase the room and the protection at $250+premium, then the employee files the claim with the covered reason, such as the new job arrangement, which the agency is easy to issue the letter and evidence. In this way, the agency seems could deal the unsold room easily, and even could benefit from this deal. Even we set any deductible, we still cannot avoid this risk. For example, in the above case, if we set 50% deductible, the agency still could benefit $25 after it.
So we are getting stuck here and affect our product development.
![Embarassed :oops:](./images/smilies/icon_redface.gif)
Jack