Our Two Cents’ Worth on Luggage Insurance

Many travel cancellation and interruption policies also provide coverage for lost, damaged, delayed or stolen bags…And this is especially necessary if you’re flying overseas and checking bags. Why? Because of the Warsaw Convention. The old Warsaw Convention limits liability to approximately $9.07 per pound for checked baggage and $400 per passenger for unchecked baggage. Do the math. If you’re only allowed 44 pounds of baggage as a coach passenger, you’re not getting a fat check, regardless of that expensive McQueen dress you have packed into your suitcase!

Indeed, at least on the surface, it seems like you’re covered. As of Feb. 28, 2007, U.S. airlines’ liability for lost or damaged luggage increased to $3,000 per passenger from the current limit of $2,800. Though it may sound good, let’s talk about that limit in realistic terms: First, there’s an entire list of excluded items not covered (jewels, furs, negotiable financial documents, et al), and then there’s something called….depreciation. The airlines may have a $3,000 liability limit, but that limit is not per bag, it’s per incident, and it’s all based on depreciated value. Hardly anyone in the history of aviation has ever received $3,000.

But there’s a little known travel insurance provision you’ve probably never heard about. And the airlines aren’t exactly rushing to tell you about it. In fact, not one single airline even advertises this provision, even though it’s available to every single passenger. It’s something called “excess valuation.”

Upon purchasing your travel insurance, ask your agent for this little known option called“excess valuation.” It provides up to $5,000 additional coverage, at a rate of about $1 per $100 in value. If you purchase excess valuation, you will be asked to describe the contents of the bag. It’s well worth it if the airline does lose your bags.

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