However, it’s not as easy as you may think to be fully compensated for your precious belonging. Insurance policies are rarely as transparent as they first appear and many people discover too late that replacing lost of damaged items come at a large personal cost.
Paying close attention to just a few areas when you choose your insurance policy can make a huge difference in the outcome of any claim:
Replacement Cost, or Relative Cost
There is a huge difference between the actual value of your possessions and the cost of replacing them. Your three-year-old iPod with the cracked screen, while still in working order will be worth only a few dollars in a policy that promises to refund the “relative cost” of your belongings.
Make sure any policy you choose gives you the replacement cost (the cost of buying the item new) of any item you insure or you’ll be paying the majority out of your own pocket.
While a policy may, for example, advertise covering up to $1500 for lost of damaged baggage (not bad you think, enough to cover your camera, Mp3 player and laptop) look closely at the wording.
There is often a reference to the “Individual item” limit- which is rarely more than $100. This means that if your Macbook worth $1500 was stolen, you’d be left $1400 out of pocket even after a successful claim.
World Nomads insurance allows you to add a Specified Item Premium to cover expensive items
Virtually every policy includes a Policy Excess – an amount of money that will not be refunded in the amount of a claim. This is usually around $50- $150, but could be as much as $500. As such if you have a high policy excess, smaller items like iPods, simple digital cameras and GPS devices may not have any real value in the event of a claim.
Insure and Go allows you to pay an extra premium to avoid any excess or even double your excess for a reduced price policy.
Safely Locked Away?
Always read your policy carefully to see under what circumstances your possessions will be covered in the event of loss. Many companies will only process a theft claim if your belongings were inside a locked room or a safe.
Damage and/or loss claims may only be accepted when a third party takes responsibility (baggage handlers at the airport, for example) and most claims will only be processed if accompanied by a report from the responsible party or police, in English (or accompanied by an official translation, which doesn’t come cheap).
STA Travel, is one of several companies that have policys aimed at adventure travelers which avoid many of the above issues.
All policies have some kinds of exclusions. Read these carefully as many are related to certain countries, areas or activities. If you want to go bungee jumping with your HelmetCam in the middle of the rainforest, you’d better search hard for a policy that would even consider accepting you.
The Small Print
No one wants to read ten pages of size 5-font print that is attached to every insurance policy, yet this is where the insurance companies make all their money. Every exclusion and exception must be listed here and explained so if you want to really make sure you’ve covered what you think you’re signing up for, there’s no other way than to get out that magnifying glass.
Check out the Travel Insurance Jargon Buster to help guide you through the jargon.
Learn more about travel safety and insurance on Matador’s Focus on Travel Safety resource page.