Baggage Loss Coverage in Travel Insurance

Introduction

Baggage loss coverage is included in many trip cancellation insurance plans. Most people traveling abroad for vacation or business will take baggage with them and they should consider baggage loss insurance. There have been many instances where baggage is lost or destroyed by the airline, or even stolen from the hotel or cruise ship. Lost luggage can cause severe disruption to a vacation or business travel when you have no clothes or any other necessary items. It is extremely important to understand what kind of baggage loss coverage you can have for your travels.

Coverage through Airline

Most airlines and other common carriers will reimburse a traveler for the loss of checked luggage if it was lost by them. However, there are limitations, such as, the amount they would pay, how they pay, the excluded articles, and the per article limits. Airlines will pay a maximum, up to $3,500 per passenger, on U.S. domestic flights and a varying rate per passenger for checked baggage on international flights which is based on either the Warsaw Convention or the Montreal Convention. If your bags don't arrive when you reach your destination, make sure to immediately file a claim with the carrier before leaving the airport/seaport or similar place.

Limitations or Troubles

• It might take weeks for an airline to admit that your baggage was lost.
• Each airline has a long list of excluded items for which they will not provide any reimbursement.
• Many airlines will not provide cash reimbursement, instead you will receive future travel vouchers. Those vouchers may or may not be of any use to you, as you may not be traveling soon or not with the same airline.
• Airlines will usually only pay for the depreciated value of your items. They will not pay according to the price you paid or the replacement value of the items in your baggage.
• Airlines may request receipts or other documentation to prove what items were in your bag. Most people don't have such receipts as they might have purchased the items a long time ago. Most people don't make the list of items in their bag before traveling. Most people will not take pictures of their items in their bag before traveling. All of that would cause delays while trying to finalize the amount of your loss due to the lost baggage.
• Even after the airline accepts your claim, it may take anywhere from a few weeks to a few months for them to make the payment to you for your lost luggage.
• Airlines will typically not pay for jewelry, watches, silver, gold, money, heirlooms, furs and other valuables. Therefore, you should either carry them within your carry-on bag or leave them at home.

According to the federal rule in the United States, if you paid a fee to the airline for checking your luggage and they lose your bag, they must refund you the checked baggage fee.

Travel Insurance

Comprehensive travel insurance provides coverage for lost, stolen or damaged baggage while traveling. Baggage would be covered while traveling with a common carrier or at other places, such as in the hotel. It will usually provide coverage during the entire trip.

Limits

There are several limits for such coverage.

• The policy limit: Total maximum amount that the insurance company will pay for baggage loss.
• The per-item limit: The maximum amount of reimbursement the insurance company will provide for each item. It is usually in the range of $250 to $300. Some plans may have a separate limit for the first item and a lower limit for subsequent items.
• The specific item limit: The maximum amount placed on specific items such as a laptop, cameras, watches, silver, gold, jewelry etc. This would typically be a portion of the total baggage coverage amount.

Tips

• The baggage loss coverage provided by most travel insurance plans would be secondary to the coverage provided by other means, such as the airline coverage or by your homeowner's insurance. However, some plans may provide primary coverage.
• Some plans may have a small deductible of $50 or $100 for a baggage loss claim, but most plans have no deductible.
• Most plans would provide coverage not only for the items that you carried at the beginning of your trip but also newly acquired items, such as souvenirs, during the return trip.
• Each plan has a list of exclusions that shows the excluded items and circumstances of loss. Therefore, it is advisable to review each policy very carefully to make sure it will meet your needs.
• Loss of checked luggage coverage provided in some travel health insurance plans may work differently than what is described in this article.

Claims

• Provide an itemized list of the items that were present in the lost baggage.
• You must provide an estimated value of the items while filing a claim.
• Any items over a certain cost, such as $150 or so must be accompanied by the original receipt.
• It is ideal to have the original receipts of all the items that you are carrying in the bag; however, that is not practical for most people. Therefore, you should at least take a picture of all the items laid out on the floor before packing your suitcase and another picture once everything has been packed into your luggage so that the insurance company can get a better idea of what you included in your baggage.

Homeowner's Insurance

Certain expensive items such as laptops, cameras, watches, silver, gold, jewelry, furs, sports equipment, family heirlooms, etc. can be insured through homeowner's insurance policy by scheduling them. However, any claim would be subject to the deductible and specific coverage of the homeowner's policy. In most states, the deductibles are very high, and in other states, the deductible is a minimum of 1% of the home value, which could be several thousand dollars. It may not always be worthwhile to insure those items that way but many times it is the only way to do so.

Conclusion

While traveling, you should always consider purchasing a comprehensive travel insurance that includes baggage loss coverage.