Travel Insurance 101: Does My Policy Cover Damaged Baggage and Contents?

Travel insurance offers payouts for loss, theft or damage to your baggage and personal items, but the primary aim isn’t compensation. Here’s what you need to know about this common benefit.

Losing your belongings or having them damaged during a holiday is unfortunately a common experience. Just ask anyone who’s ever had checked luggage come through the carousel with broken handles or missing wheels, or worse – had their hotel room broken into.

There are plenty of other potential mishaps too. Your hotel’s laundry service might ruin your expensive sweater, the tour guide may drop your iPhone into the crocodile enclosure, faulty wiring at your Airbnb could short out your laptop… 

Should your baggage and personal belongings become lost, damaged or stolen while overseas, you will be able to claim compensation – provided you are covered by a travel insurance policy.

This is a standard benefit offered in all travel insurance plans, and commonly extends to cover delayed luggage (which is as inconvenient as losing your items altogether). 

Let’s take a closer look at how insurance coverage for luggage and personal items coverage works.

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What exactly counts as “luggage and personal belongings” in my travel insurance plan?

For the most part, it is as it sounds – your travel plan covers the luggage you and personal items you bring on your holiday. 

Hence, anything from clothes, accessories, electronics and gadgets to the shiny new luggage case you pack them in is covered. Also counted is everything you carry with you onto the plane, including your carry-on bag, new shoes, fancy sunglasses and designer jacket.

Ok, that’s pretty straightforward. But what about other important essentials such as your passport, cash and credit cards?

Well, travel documents (including passports and visas), cash and cards, and travellers cheques are commonly not counted as luggage and personal belongings, which means they are not covered under this benefit. 

However, travel plans do provide cover for these items as well – just that they do so under another benefit, and with a different claims limit. This, ultimately, is a good thing; it essentially gives you multiple “pots” to draw from, which could foster a higher total compensation.

In addition, sporting or specialised equipment are also generally not counted as luggage and personal belongings. Instead, such items are usually covered under their own category, and may only be available as paid add-ons.

How do I claim for lost or damaged baggage and personal items?

If your luggage or belongings gets lost, damaged or stolen, you should document the event and submit a claim to your insurer. Note the following pointers:

• If there was a theft or robbery, make a police report within 24 hours of the incident.

• For items with visible damage, take plenty of photographs clearly showing the damage. As a precaution, you may want to take some “before” photos of your items to substantiate your claim.

• Ask for a report or statement from any primary parties involved, such as the hotel that damaged your scarf, or the tour operator that lost your iPhone. Ask for compensation, and ensure your compensation request is noted in the report or statement. To encourage cooperation, explain that the report is merely for insurance purposes, and not the foundation of a lawsuit. 

• You should also prepare copies of sale receipts or bank statements indicating the price of your items. If you plan to seek repairs, obtain a quotation from a qualified party.

See also: Guide To Making Travel Insurance Claims

How much can I claim for damaged or lost baggage? 

Your travel plan will spell out exactly how much coverage you are entitled to for damaged or lost baggage and personal items. Higher tier plans will provide increased coverage, and you can also boost the cover amount by purchasing add-ons. 

It is important to note that insurers set limits on how much they will pay out for different categories of items. These are known as sub-limits, and can make a dramatic difference between the amount of coverage you were expecting, and the actual coverage you can get.

Here’s an example to illustrate how sub-limits work. 

Source: Singlife

Here’s a screenshot of the policy document for Singlife’s travel insurance plan. As you can see, the plan offers Loss of Baggage benefits of up to S$8,000. But, for any one article or group of articles, the maximum claim is S$500. 

What this means is that if you want to claim for a stolen laptop that costs S$2,000, Singlife will only pay out S$500 or S$700 at most – even though your coverage for Loss of Baggage is at least S$3,000.

This is not to call out Singlife; it is a common practice across all insurance policies. 

Benefit sub-limits aren’t automatically a bad thing, but travellers should take note of them and tailor what they bring with them accordingly. 

Alternatively, consider getting extra insurance coverage for costly essentials such as your mobile phone. You do so via a rider, or by purchasing a separate, specialised policy. 

See also: Is Travel Insurance With COVID-19 Coverage Still Necessary?

How much will I receive for my claim?

Besides sub-limits, the compensation offered by your insurer can also be affected in other ways. 

Generally, insurers apply their own assessment on the value of the items you are claiming for. This almost always means applying a “discount” for wear-and-tear according to the age of your item, even if you are the sort that keeps your belongings in pristine condition. 

Another factor that may impact your compensation is depreciation. For instance, your insurer may benchmark the payout for an older iPhone against typical trade-in values, so don’t expect to be reimbursed for the full price (or not even close to it) you paid back then. 

Luggage and belongings cover – more for convenience rather than like-for-like replacement

At the end of the day, the primary focus of travel insurance is helping you deal with the inconvenience or disruption to your holiday arising from loss or damage to your baggage and items. 

This is made obvious when considering another mainstay of travel policies: delayed luggage benefits, which entitles you to claim compensation should you be forced to go without your luggage for (typically) six hours or longer. 

If you eventually get your items back, why would the insurer offer a payout in the first place? Well, that’s because not having your luggage with you when you land means you will need to purchase essentials and personal items. 

You may need to buy a change of clothes, toiletries, and perhaps medication to carry on with your holiday, or at least get through the night. 

These are unexpected expenses, and the items you buy won’t be a one-to-one replacement. But with a travel insurance plan, you can at least be compensated for your bad luck, even if partially. 

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