Baggage Insurance: Coverage, Claim & Exclusions

Updated: 22-09-2022 07:23:47 AM

Losing your baggage while travelling due to theft or some other reason is quite a common incident. The loss incurred due to this might put people in a big trouble. To get compensated for the loss and the damage to the luggage while travelling, you can opt for a baggage insurance.

What is Baggage Insurance?

A baggage insurance is an important part of a travel insurance plan. However, it can also be taken as a stand alone insurance. During a flight, in case the baggage is lost or its contents get damaged due to fire or other reasons, you can get the reimbursement for the loss through a baggage insurance.

Baggage is the “personal goods belonging to the insured”. The insurance also covers the loss you face due to baggage delay. Thus, a baggage insurance ensures a peaceful and relaxed travelling, considering the fact that many a times, the airlines authorities do not provide a satisfactory solution to such problems.

Types of Baggage Insurance

There are three types of baggage insurance:

• For single trip: The plan covers the risks associated with the baggage for a single trip
• For multiple trips: The package covers several trips; the number depends on the premium amount
• For specific item: The plan compensates only for loss or damage of items for which the insurance has been taken. If a traveller wants to insure only laptops, cameras or musical instruments, this type of baggage insurance comes into picture

What all Baggage Insurance Covers?

A baggage insurance offers the following coverage:

• Cost of luggage: Some travellers like to use expensive travel bags. If the baggage gets lost during the travel, the insurance policy covers the cost of the bags
• Cost of content: Travellers carry expensive items and clothing. If any of these get lost or spoiled, the insurance company pays for the same
• Carry-on bags: Airlines are generally not liable for paying compensation in case the carry-on bag gets lost. These bags are sometimes quite costly and the insurance covers such losses
• Delay in baggage delivery: Many a times, the airlines do not send the baggage on the same flight as that of the traveller, leading to luggage delay. The insurance covers losses arising due to such situations

How Baggage Insurance Functions?

A baggage insurance can function as a part of a travel insurance or as a unique insurance policy. The following steps are generally followed in this plan:

• An individual applies for a baggage insurance
• The insurance company checks the eligibility
• If the insurance company finds the applicant suitable for the policy, the applicant submits the documents
• After the policy commences if any unforeseen event (as mentioned in the policy) occurs with the policy holder, he/she immediately informs about the issue at the customer care number of the insurance company
• A representative from the insurance company verifies the details with the policy holder and the airlines.
• If the claim is genuine, the intrinsic value of the baggage is paid. Else, the claim is rejected
• In case the policy holder is not satisfied with the resolution or compensation amount, he/she can raise a dispute in the court of law

Eligibility Criteria

Baggage Insurance is a flexible option. The plan can be taken by:

• Travellers on both domestic and international trips
• If the baggage is accompanied by the owner, it is eligible for reimbursement in case of loss due to accidents

Baggage Insurance Claim Process

The insurance companies are known to process the claim fast. Applying for a baggage insurance claim is a hassle-free process.

• As soon as the policy holder becomes aware of the loss/damage, he/she needs to call up the customer care of the insurance company and intimate about the mishap. The beneficiary can also visit the branch of the insurance company and intimate about the issue
• Policy holder then submits the required documents ling with the list of items lost or damaged
• A representative from the insurer contacts the policy holder and the airlines company to verify the claim
• If the claim is genuine, the intrinsic value of the lost good or damage is paid in the beneficiary account
• If the claim is not found as per the policy, then it is rejected; the policy holder is intimated about the same
• If the claimant is not satisfied with the settlement amount or does not agree with the rejection of the claim, a dispute can be raised in the court of law

Documents Required for Claim Process

For filing a claim under baggage insurance, the following documents need to be submitted:

• Duly filled in claim form
• Policy documents
• Details of the lost or damaged content
• Copy of an FIR in case of theft or other similar incidents
• Photocopy of the baggage insurance policy

Time Taken to Settle Claims

Usually, it takes 15-30 days to settle a baggage insurance claim. In case of any dispute where court is involved, it might take more time.

Cases Where you Can’t Make Claims for Baggage Insurance (Exclusions) 

Compensation for baggage loss or damage is not available for the following events:

• Loss or damage of consumable goods
• Loss or damage of goods caused due to nuclear explosions or wars
• Consequential loss caused due to damage of insured goods
• Damage caused due to cleaning, bleaching, repairing, renovation or dyeing
• Loss or damage to manuscripts, deeds, money, securities, stamps, certificates and bonds
• Loss or damage of articles which were not part of the baggage when the trip commenced
• Breakage and cracking of fragile items like glass crockery, paintings, musical instruments, binoculars, lenses and sculptures

Companies offering Baggage Insurance in India

Some of the companies offering Baggage Insurance in India are:

• HDFC Ergo
• Liberty General Insurance
• New India Assurance
• SBI General

Important Aspects

Some points a policy holder should keep in mind while purchasing a baggage insurance are:

• Make a note of all the baggage content before travelling. If the baggage is lost, the insured needs to mention the items on the list while claiming the insurance amount.
• In case of any unforeseen event, the beneficiary will get paid only for the amount that has been mentioned while applying for the insurance.

Advantages of Buying Baggage Insurance

A baggage insurance should be a must for people who travel regularly. Some key benefits of this insurance are:

• It covers the expenses of stolen or lost items in your luggage during the trip
• Accurately covers the cost of the lost or damaged baggage
• Ensures a hassle-free travel experience for both domestic and international trips
• Covers the expenses of lost or damaged luggage caused due to fire, riots or strikes

FAQs

Q1. What is the premium amount for baggage insurance?

The premium depends on the sum insured, geographical limits and transit nature and details.

Q2. What is the sum insured for Baggage Insurance?

Sum insured will be fixed as per the current market value of the items carried on the trip.

Q3. What is the policy period of baggage insurance?

The policy can be taken for a single trip or multiple trips.

Q4. Is there any extension available for baggage insurance?

Yes, a policy holder can ask for an extension of the geographical limit.

Q5. What is referred to as ‘Intrinsic Value’ in baggage insurance?

It refers to the net value of the baggage after calculating the depreciation value caused by general wear and tear.