Cover my luggage? Travel insurance or home insurance?
Wednesday, 19 August 2009 05:34
Holidays are supposed to be a time to relax, wind down and escape from the stresses of everyday life.
But recent statistics from the European Commission reveal one piece of luggage is lost for every 64 passengers - hardly the best remedy for stressed-out Brits looking for a hassle-free break.
To make matters worse, many passengers whose luggage is lost often find it difficult to receive reimbursement.
There is a simple way to provide yourself with peace of mind, however, and that is to buy an insurance policy which covers you in the event your luggage is accidentally sent to Abu Dhabi instead of Alicante and is never seen again.
The airlines themselves will often provide a certain amount of money to cover any losses. Under the Montreal Convention, if your luggage has not been returned to you after 21 days they must reimburse you for essentials in your luggage which have receipts.
The maximum they can provide is £800.
In the meantime, some airlines provide a one-off payment of around £50 to provide you with essentials such as toiletries when the suitcase first goes missing.
However, travel insurance will most likely offer you a better deal.
Research by consumer organisation Which? found a travel insurance policy will pay, on average, £200 for luggage missing for 48 hours.
If it's not returned and declared permanently lost by the airline you could receive an average of between £1,500 and £2,000 and up to a maximum of £2,500.
Comparison site, Moneysupermarket.co.uk, recommends getting at least £1,500 worth of cover for baggage.
But with the recession forcing many of us to make cost-cutting measures, people are looking at other ways cover themselves for missing luggage.
Many insurers say if you have home contents insurance you won't need baggage cover on your travel insurance policy.
This is because many home contents insurance policies cover you for possessions away from home.
As a result, you can bring down the price of your travel insurance premiums. Comparison website, Confused.com, reckons you could save around 25 per cent by excluding personal belongings and baggage cover from your travel insurance.
And the British Insurance Brokers Association (Biba) even goes as far to say that this is the better option if you are keen to guard against lost luggage.
Graeme Trudgill, technical services manager for the organisation, said it came as a shock to many, but there were a number of items which were not insured if placed in your luggage.
This has resulted in people, who have had items stolen from checked-in luggage, unable to claim.
"The good news is some household policies may offer a wider cover than travel policies," said Mr Trudgill.
"Valuables are often more appropriately protected under the personal possessions section of a household policy - although this is an optional extra that many people do not buy - which would cover them for all risks cover around the world."
There is a word of warning for holidaymakers considering this option. Biba said no two household policies are the same and some of the cheaper plans might not cover valuables.
It is therefore important to cast your eye over the small print of your home contents insurance before embarking on your holiday.
Elaine Parkes, of Legal & General insurance said: "We recommend people check their cover every time they plan to go away, regardless of how far or for how long."
Moneysupermarket also urges people considering this avenue to ensure cover is in place and goes as far as to suggest putting in a call to your contents insurance provider to make sure you are protected.
There is one major pitfall of using your home insurance to cover your luggage. If your suitcase does go missing, and fails to see the light of day, you'll need to make a claim on your home insurance policy and this will drive up your premiums in future.
And Biba warns: "Any claims you make against your household insurance - for example if you have something stolen while on holiday - will risk losing your no claims bonus."
Confused.com also warns many home insurers only cover personal belongings in foreign countries for up to 60 days under an additional personal possessions policy.
If you are away for up to 60 days, it said, you may invalidate your home insurance as some providers will cancel a policy if a home is left empty for more than 30 days.
Again, this is just another good reason to check your policy before heading off abroad.
Whatever method you plan to use to ensure your items, you must always make sure you keep receipts for expensive items.
Making a claim and receiving full reimbursement will be a lot easier and rewarding if you do this.
Saga published the results of research earlier this year which revealed the average contents of a suitcase being taken on a winter holiday is worth £643 and on a summer holiday is £405.
However, a Saga spokesman said: "The research revealed a worrying fact that many people to do keep receipts and many do not, therefore, know the makes and models of items in their case, which could make it more difficult for them to make a thorough claim for any loss."
The firm, which runs its own travel insurance policies, reckons by simply keeping hold of your receipts or - at the very least - writing down the make and model numbers for any valuables you take on holiday, you could save yourself a lot of hassle when making a claim.
Elaine Parkes of Legal and General also urged holidaymakers to keep details of their insurance in their hand luggage.
And, finally, David Neave, of The Co-operative Insurance, offered advice for people to prevent luggage from going missing in the first place.
He suggested avoiding the temptation to pack everything, just on the off chance you might need it.
"The most sensible thing to do," he said, "is reduce the amount of luggage you take and share out expensive items across your luggage rather than putting it all into one suitcase."
Kate Saines
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