How can insurance protect me if my luggage is lost, stolen or damaged?

By Insurance.com Posted : 01/01/2011

Baggage or personal effects insurance is a type of travel insurance to cover lost, stolen or damaged luggage. The cost to insure $1,000 worth of belongings for a week would be about $50 a year, according to the Insurance Information Institute. Before you shell out money for the insurance, check to see what kind of coverage the tour operator or airline provides. You might also have travel insurance through a credit card to cover checked or carry-on luggage that's lost or damaged.

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Home or renters insurance would typically cover any of your belongings that are stolen while traveling. Don't forget you would have to pay the deductible, though, which could be more than the cost of your luggage. Remember, too, that home and renters insurance have dollar limits on coverage for valuables, so you might not be fully protected if you travel with expensive jewelry, computer equipment, sports gear or other pricey items.

Consider buying an endorsement or floater on your home insurance or renters insurance policy. With an endorsement or floater, you can purchase as much coverage as needed. The protection is generally good for anywhere in the world against theft as well as loss or accidental damage.

Finally, know your rights when you fly. The airline usually will pay for repairs if your luggage is damaged after you check it. If your bags are misplaced and delayed, you fill out a claim, and the airline will usually track them down and have them to you within hours.

If your luggage is permanently lost or stolen while in the airline's care, you must fill out another, more detailed claim. The airline will use the information to estimate the depreciated value of your possessions and may ask for sales receipts or other information to back up the claim. It usually takes one to three months for the airlines to pay passengers for lost luggage, according to the U.S. Department of Transportation's Aviation Consumer Protection Division.

Airlines limit their liability for delayed, lost or damaged checked baggage, but in some cases you can purchase "excess valuation," when you check in for a flight. The excess valuation isn't an insurance policy, but it increases the carrier's potential liability. Beware, though, the carrier might not sell excess valuation for expensive or fragile items, such as antiques, musical instruments, jewelry or cash.

For more about insurance considerations when traveling, see "Inauguration travel tips."

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