When does travel insurance actually cover for lost, or stolen belongings?

A well-known feature of travel insurance is cover for luggage and personal effects, however it is also one of the most complained about, and misinterpreted aspects of the policy.

Did you know?

  • Leaving your phone in a restaurant is not covered?
  • Leaving your bag in the back of a taxi is not covered?
  • Forgetting a suitcase on the airport conveyer belt is not covered?

Noodlies, Sydney food blog has done a fair bit of travelling (and spent a bit on insurance, too). So I thought this guide from the folks at Compare Insurance explaining travel insurance coverage for lost or stolen belongings might be useful for readers.

The devil’s in the detail
“Compare Insurance often receives reviews from customers complaining about unpaid claims for luggage and personal effects. And in most cases the insurer has denied the claim because items were left ‘unattended’ or because there wasn’t enough information to the insurer.” Natalie Ball, Director Compare Insurance.

Real life examples of unpaid claims that could have been avoided
*names and locations have been changed

Sarah from Melbourne*: “During my last holiday I lost my baggage and spent the remainder of the trip calling my insurer to file a claim. After numerous phone calls and emails I was told that my baggage could not be claimed as it was lost due to my negligence.

Peter from Brisbane*: “At the train station in Barcelona my iPhone was stolen from my bag that I had left with a friend whilst I went to the bathroom. Once I realised the loss, I reported it to the police and made a claim on my insurance, which was declined because I was told my bag was unattended!

James from Jervis Bay*: “My luggage was misdirected while travelling to Hong Kong, and the airline refused to accept it was their fault in writing. Then my travel insurance claim was rejected as I did not have the necessary documentation.

air asia to langkawi

What is luggage and personal effects, in the travel insurance world?

The basic definition of “baggage and personal effects” is: Any personal items owned by you and that you take with you, or buy on your journey and which are designed to be worn or carried about with you. This includes items of clothing, personal jewellery, photographic and video equipment or personal computers, or electrical devices or portable equipment.

What typical situations are covered?

  • Belongings that are lost, stolen or damaged during your trip, whilst they are accompanying you.
  • 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 boot or in a locked storage compartment and forced entry must have been made.

What typical situations are not covered?

  • 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.
  • Jewellery, mobile phones, cameras, video cameras, personal computers that are transported in the cargo hold of any aircraft, ship, train, train, tram or bus.
  • Items unattended in a motor vehicle, unless they were locked in the boot or in a locked storage compartment.
  • 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.

What do travellers need to do/have to make a successful claim?

  • Report the loss or theft ASAP to the police within 24 hours and get written proof for the insurer.
  • Report the loss or theft ASAP to your transport carrier e.g. bus, airline, train and get written proof for the insurer.
  • Report the loss or theft ASAP to your accommodation provider and get written proof for the insurer.
  • Provide original receipts or photos of items to provide proof of ownership.
  • If you’re claiming for travel delay expenses, you must be able to prove to the insurer that you have done everything reasonable to avoid delay expenses, and in many cases you are going to need to provide written proof of cancelled flights, delays or loss.
  • If you are intoxicated at the time of loss or theft of your belongings, your claim is likely tobe rejected.

Luggage and personal belongings advice:

  • Always look for lockable storage compartments where you can leave your luggage.
  • Keep your belongings with you at all times, within your sight and within reach.
  • Be vigilant – especially if you’re in an area which is known for thieves.
  • Don’t leave your belongings on a beach when you go swimming.
  • Don’t leave your bags with someone you’ve just met.
  • Always keep expensive items on your person – not in the hold of a transport carrier for example.

Baggage exclusions aside, travel insurance is not insignificant – far from it.

If illness or weather alter your travel plans and your trip payments are non-refundable, you could see your holiday end in financial ruin.

Travel insurance covers 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 underwriter has a different list of items and situations that are covered, so it pays to shop around and compare different policies. For example some insurers do not cover sporting equipment, musical instruments, jewellery, or cash under a standard policy. Always refer to an insurer’s fine print to see what items and situations they exclude.

Compare Insurance is one provider that helps consumers compare, review and potentially save on travel insurance.