You’ve probably taken out a travel insurance policy on a previous trip, or you are considering the purchase of one for an upcoming trip. You’re patting yourself on the back for doing the responsible thing, by taking out travel insurance. You think you’ve given both you and your loved ones the peace of mind knowing that if anything happens to go wrong you’re covered.
Obviously, you considered travel insurance so that in the event of an accident, you’re covered, your stuff gets stolen, you’re covered, even if your vacation gets canceled – depending on the type of insurance you get, you’re covered. Now that is peace of mind, or is it? Check for clauses hidden in the small print that could in fact ‘un-cover’ you? The bargain you thought you picked up by combining your travel insurance with your vacation package may not seem so impressive, if in the unfortunate event that you need to claim for stolen possessions the company starts questioning your claims’ credibility even rejecting it all together.
The person selling the insurance won’t tell you about the exception clauses in the policy
If you haven’t taken the time to read the small print of the policy you’re considering you may be in for a small shock if anything does, in fact, go wrong with your vacation. There are some standard conditions when it comes to the small print of travel insurance, what will and won’t be covered and in what circumstances said items will not be covered. Most of us assume that once your insurance says it covers your items in the event of theft you are fully covered against all forms of theft. Therein lies the source of most of the complaints made against insurance companies that reject such a claim.
Imagine if you will that you have treated yourself to a convertible rental car while on your vacation; you’re driving down with roof down enjoying the sunshine beating on your shoulders. Then all of a sudden as you pull up to the traffic lights, someone reaches in and grabs your handbag from the passenger seat, before you open your mouth to shout the lights have changed and away screeches away with your handbag hotel room key and possibly your passport.
Clearly that would be considered theft; however, in the past, some companies have deemed such behavior as ‘negligent’ and thus refused to satisfy the claim. By lowering the roof of your vehicle you increased your risk of falling victim to crime as well as increasing the likelihood of you being the cause of an accident as removing the roof increases your exposure to the elements and their effects-sunstroke, heat exhaustion to name but a few. Some insurers may have a clause in their coverage that is specific to convertible drivers and their exclusions may prove to be an interesting read, preferably before you make the purchase of the policy.
Read the policy and then buy it, don’t fall for the pressure to buy now
By reading the policy document in its entirety you will be aware of any conditions relating to stolen property that may impact on the choices you make regarding the possessions you choose to take with you on your vacation. Insurers expect you to value your property enough to take care of them, if the actions leading up to their theft indicate that you didn’t, in fact, take reasonable care of your property the insurer may not pay out.
Follow these tips
Do you know what to do if something goes wrong? Knowing upfront can save a lot of heartache down the track. The following are a few tips travel insurance tips that you should consider before they leave on their trip. The chances are not great that any of these issues may occur to you…but if they do you will be a lot better prepared if you didn’t.
Proof of ownership – Can you prove you actually owned the items and it was in your luggage?
Travel insurance companies will often refuse to pay for lost or stolen items unless that you can prove that you own them. The best way is with the original receipt. We might keep receipts for the expensive items but who has a receipt for every item you are taking away with you!
Now, travel insurance companies are not all evil and will cover you for general things like clothes, toiletries, and luggage but without proof of brand or value, you’ll often only get a fraction of the true replacement cost.
Take a photo of everything that you are taking on your trip. Get the brand and style where possible. Put everything you’re packing on the bed, and take photos before you place your items in your bag. Detail all this in a spreadsheet as well. Scan all receipts, manuals, warranty cards, or tags. You can claim when you get home but I’d suggest emailing all the photos, scans and spreadsheet to a free email site like Gmail or Hotmail so you can claim while away if needed. Once you’ve done this you will just need to update the information when you buy something new.
Replacement value vs real value – you may not get what you think it is worth
It has become common now for car or home and contents insurance to offer new for old replacement. This is generally not how travel insurance works. You’ll usually be offered the value of the goods minus depreciation. Some items hold their value really well and you actually won’t be able to buy a replacement one for anywhere near the money the travel insurance company gives you. You should always file a complaint if this is the case. Provide proof of the true market value (e.g. from classifieds, second-hand shops, or eBay). If the travel insurance company still refuses to cover the real cost then take it to the ombudsman.
Stolen goods and police reports – If you don’t make a report, you may not get reimbursed
Travel insurance companies will generally not just take your word for it when something is stolen. They want some sort of proof. This is generally best in the form of a police report but can be a statement from the airline, cruise ship, etc if it happened there.
Police reports can be a tricky thing to obtain in some countries and some countries have special tourist police who are the best to approach in regards to this. If they are not available, you may be asked to pay a fee for this service – which in many places, including here in the U.S, where you can be charged up to $15.00. However, if the amount is small then just pay as it probably isn’t worth the hassle. If it is way larger, maybe you are being scammed by a dishonest police officer – especially in a third-world country. You might want to contact your hotel to help with this or find someone local to consult. If the price is not normal, contact your embassy or consulate. They should know about this in order to help future travelers from being scammed and may be able to help.
If you have trouble speaking the local language and the police can’t understand you then you could try an online translation service such as Google Translate, or find a local or fellow traveler who speaks English and take them along to the police station (a tip is generally appreciated).
Unattended luggage – Lost Luggage – Stolen Luggage
A major area in which travel insurance will not cover you is when your bags are left unattended. This may seem like it would rarely happen as you normally don’t leave your luggage just lying around but unattended is usually defined as being left in an unlocked environment or with someone you don’t know. Common scenarios are left luggage at hotels or hostels, with doormen, or with tour companies.
Before traveling you can ask yourself whether you need to take an expensive watch with you on your travels if it not essential it might be better to leave the item at home. Similarly, if you are just popping down to the pool, do you need to take your whole bag with your purse and passport in it, could you not leave said items locked away in your room safe or if one is not available in the hotel’s safe? If the answer is yes then you should, rather than risk your personal effects being stolen while you top up your tan.
You’d be surprised as to what is not covered by insurance- think highly valuable electronics
A well-known feature of travel insurance is coverage for luggage and personal effects, however, it is also one of the most complained about, and misinterpreted aspects of the policy. There are several different types of luggage insurance products on the market today that you might want to consider, and like always you have to read the fine print on the luggage insurance portion on the insurance to see what is truly covered if you have to make a claim. You will be amazed by what is NOT COVERED when it comes to luggage insurance, as well as all of the documentation, and/or times that needs to pass before a claim is paid – if at all. Remember, all airlines and most insurance companies pro-rate the value of the luggage and its contents, and many will not reimburse for specific high-value items such as electronics, laptops, smartphones, glasses, and other high-value items.
The following is a general listing of what insurance companies may or may not cover is you suffer a loss or theft of your luggage and/or other property while traveling you need to know up-front.
- Theft of cash, (to a specified limit) you will need a police report for proof of loss.
- If your luggage is delayed (over a certain number of hours as specified by the insurer) and you need to buy clothes or food, then your travel insurance will reimbursed these expenses (up to an amount specified by the insurer).
- If your travel documents e.g. passport, credit cards are lost or stolen, any financial loss you incur because of this will be covered by your travel insurance.
- Luggage and personal effects left in a motor vehicle during daylight hours, your belongings must have been locked in the trunk or in a locked storage compartment and forced entry must have been made.
What typical situations will generally not be covered for reimbursement in standard travel insurance policies – Remember each insurance policy is different so check the fine print.
- Leaving your phone in a restaurant.
- Leaving your bag in the back of a taxi.
- Forgetting a suitcase on the airport conveyor belt.
- Items left in a hotel room, or hotel luggage room after check out.
- Items left behind in any aircraft, ship, train, tram, taxi or bus.
- Cash, jewelry, sporting goods, musical instruments, mobile phones, cameras, video cameras, personal computers that are transported in the cargo hold of any aircraft, ship, train, train, tram or bus.
- Items left unattended or unsupervised in a public place.
- If you’re due reimbursement from a transport carrier for the loss of your items, travel insurance will not cover the loss. However, if you’re not reimbursed the full amount, travel insurance will make up the difference (up to an amount specified by the insurer).
- What do insurers mean when they say your items are ‘unattended’ or ‘unsupervised’?
When you leave your luggage and personal effects
- With a person, you did not know prior to commencing your journey.
- In a position where it can be taken without your knowledge.
- At such a distance from you that you are unable to prevent it being taken.
Whether you travel for business or pleasure, there is a new insurance company that will pay you $1,000 for each bag lost by any airline after four days it’s missing. The cost is only $5, but gives you peace of mind, which if you check luggage will consider priceless. The fine print is easy to understand, and you can get more insurance if needed. For example, if you have a bag with a replacement value of $2,000, a $10 insurance fee is what you would pay for the trip. USA Today has an article and a video of this service to give you more information. The insurance company involved in this is Blue Ribbon Bags. Here are a few interesting facts about their coverage which makes this luggage insurance appealing to many travelers:
- Proof of baggage content’s value (receipts) is not required to receive payment.
- One purchase ($5) covers all baggage checked at the airport, including baggage checked at the gate at the last minute before your flight.
- You may purchase baggage protection up to the moment prior to your flight’s departure.
- One purchase ($5) covers your baggage on a round trip or one-way ticket, regardless of the number of connections or stopovers, as long as all flights under a single airline confirmation number.
Now many travelers may wonder why is this type of insurance is offered at a rate far cheaper than other insurance companies. It’s a simple answer – few travelers actually have their luggage lost, stolen, or delayed more than four days. Yes, many bags are delayed and miss a flight, but they are generally put on the next flight, sometimes being the next day. The numbers benefit the insurance company, and they know the majority of the time, the airlines will be able to get your luggage to you within a few hours, or maybe a few days. Remember, this insurance only pays after four days, which will really be the end of the 24th hour of the fourth day. But in the end, luggage does get stolen, or delayed for longer periods, which is where this luggage insurance really stands apart from the rest.
Baggage exclusions aside, travel insurance is not insignificant – far from it. If illness or weather alters your travel plans and your trip payments are non-refundable, you could see your vacation end in financial ruin. Travel insurance should be more importantly looked at to provide coverage for trip cancellation/interruption and overseas emergency medical expenses for injury or illness that can easily run into tens of thousands of dollars.
It’s important to remember that each insurance underwriter has a different list of items and situations that are covered, so it pays to shop around and compare different policies. Always refer to an insurer’s fine print to see what items and situations they exclude.