Baggage loss is covered by travel insurance policy. The typical insurance policy covers it only up to a certain pre-determined amount. Most policies include a per-person maximum payout, typically ranging from $500 to $2,500. A few policies also have "per article" limits, usually $250 per item. And some also have a "first article maximum" that is higher than the "per article" limit. A few policies have deductibles, typically $50 per claim.
The most complicated parts of baggage loss coverage have to do with which items are actually covered and how much you'll receive if you have to file a claim.
What Items are Covered
Baggage and personal effects are luggage, personal possessions and travel documents. Those items that are shipped ahead, aren't covered.
But unfortunately, each underwriter has a different, detailed list of items that, although they might happen to be in your suitcase, aren't covered at all. Some policy doesn't cover animals, sunglasses, contact lenses, prescription medications, telephones, computer hardware or software, professional equipment, keys, cash or credit cards. Other underwriters exclude cameras and accessories, brittle and fragile items, musical instruments, stamp collections – you get the idea. So, you see that it is very important to read the details before signing the agreement between you and insurance company.
There are also complications when considering limits on high-value items. Most travel insurance policies include a limit, generally a total of $500, on coverage of items they consider to be high-value. And this includes jewelry, watches, anything made of gold, silver or platinum (even partially), fur-trimmed items, cameras and accessories, at a minimum.
It is needed for you to figure out how much the policy will actually pay if you need to file a claim. Moreover, you may also need to provide receipts or other documentation of value.
What Damages are Not Covered
As well as there are items that are covered, there are also types of damage not covered. As a rule, normal wear and tear and breakage of fragile or brittle articles aren't covered. But many companies establish their own rules and it is important to learn these rules in advance. Some companies, for example, don't cover damage from "inherent vice or damage," whatever that might be, or from "radioactive contamination." Other will not cover damage from "rodents, animals, insects or vermin," nor will they cover damage from "electrical current, including electrical arcing."
But don't think that travel insurance is worthless. If illness or weather could alter your travel plans and your trip payments are nonrefundable, you might want to take a very close look at travel insurance. If you're already planning to insure your trip against cancellation or financial default, then baggage loss protection is what you need.
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