Aussies lose out on luggage cover clause

At least 66% of Aussies say that cover for luggage and personal belongings motivates their decision to buy travel insurance. However, a stark number of travellers are simply unaware that their belongings are not covered when left unattended, leaving them out-of-pocket come claim time.

Natalie Ball, director, Comparetravelinsurance.com.au says,

“By definition, ‘unattended items’ refers to personal belongings not under your observation. In terms of travel insurance small print, it could also refer to items left behind in a taxi, your hire car, a plane seat pocket or restroom. Insurers need to know that you’re taking reasonable steps to protect your belongings, which is difficult to establish when you’ve left them unattended in a public place.”

Ball says that this clause often comes as a surprise to policyholders who may go to great lengths to dispute a denied claim.

“While it may seem unfair, insurers are simply mitigating risk. When your belongings are improperly attended to, or at a high risk of theft, cover will often be denied. We’re in the customer’s corner and aim to inform and educate travellers. Most travellers are not aware of this exclusion.”

Ball says that while rules apply, insurers will usually assess individual cases on their merits.

“There are a broad range of circumstances in which items go missing, and insurers will evaluate each claim individually. There are scenarios which would almost always be covered, for instance, getting robbed on the street or unexpectedly losing your wedding band in the sea. Provided you were taking reasonable steps to prevent these events from occurring, you’d be covered by travel insurance.”

Ball notes however, that luggage lost or damaged while in the care of your airline or transport provider would not be covered by travel insurance.

“As a rule, if the airline or transport provider loses or damages your luggage, they are responsible for compensating you. If the airline rejects your claim or doesn't offer you as much as you think your luggage was worth, you can then take the matter to your insurer.”

Per-item limits surprises

After losing her ring while swimming in the ocean on holidays, appealed to her travel insurer to reimburse the cost. However, the full cost of her ring was not paid out.

“I lost my wedding ring, a very sentimental item worth about $6,000 and I only received $750 back,” Melissa told Comparetravelinsurance.com.au. “I can’t even replace it! My policy stated that I have luggage and personal effects up to $15,000 so why was the amount so low?”

“Obviously I was really unhappy with the outcome and wouldn’t buy travel insurance from this company again.”

Ball says that despite Melissa’s overall coverage, the maximum her insurer would pay for individual items was limited to $750.

“When your policy says it covers for a total of $10,000 make sure you read the policy wording to understand individual item claim limits. As an example, laptops and cameras will usually be covered for up to $3,000 and all other items for up to $1,000. If you are planning on travelling with items that fall outside of these sub-limits, look for a policy that allows you to add these items on to your policy separately.”

Red-leather flag

For retired couple Mick and Debbie Bennet, a case of absent-mindedness led to the loss of a brand-new leather jacket, and a disappointing end to their European holiday.

In a rush to meet their tour bus, Debbie accidentally left her recently purchased red jacket on the back of a restaurant chair. After realising her mistake the next morning, the pair phoned the restaurant but were unable to locate the $700 item.

Once they arrived back in Australia, the couple’s attempt to claim back the cost of the jacket was denied, with their insurer reasoning that it had been left unsupervised in a public place.

“We were obviously very upset with the outcome,” says Mr Bennet. “Leaving the jacket behind was careless but we would have expected the insurer to cut us some slack.”

Ball says that while a claim knockback can be frustrating, understanding one’s insurance policy can prevent future disappointment.

“Before you write off your insurer, consider the facts; did you read the policy wording? Just because you have luggage cover doesn’t mean you’d be covered for every scenario. In the Bennet’s case, it’s hard to dispute the fact that the item was left unattended in a public place. Once you understand the rules, it’s much easier to navigate the claims process.

Words of advice

• Be smart about smartphones: not all insurers cover smartphones, so shop around before settling on a policy. Very often exclusions also apply to cracked screens.
• Check item exclusions: Fragile items, sporting goods (while in use), drones and bicycles are commonly excluded from cover. Check the PDS (product disclosure statement) before you buy.
• Items devalue over time: Luggage and personal effects are covered only for their depreciated value, unless you have purchased additional cover. When buying clothes and shoes on a trip, keep the receipts in a safe place to prove that they are new.
• Insurers need evidence: Most insurance companies will receipts as proof of ownership and a written report from the police or relevant authority within 24 hours.