Although there is no set rule, most policies will have a sub-limit for each item claimed, often around $750 – you should check details of the amount in the Product Disclosure Statement (PDS). If a policy has $10,000 cover for personal items for example, the maximum amount you could claim for any one item is $750. Practically speaking in this example, if you travelled wearing a ring worth $3,000 and it gets stolen while you’re away, if you had a $750 sub-limit, the maximum amount you could claim would be $750, even though the total limit was $10,000. That would leave you out of pocket a very painful $2,250, and that’s not including any excess that might apply.
Sub-limits are a good example of why it’s vital you read the PDS thoroughly before you purchase a travel insurance policy.
So what can you do?
Fortunately, you do have a few options up your sleeve if your policy doesn’t offer enough cover for expensive and valuable items. Many insurers will let you increase your cover options for valuable items such as laptops, jewellery and cameras for an additional premium.
If you’re buying insurance online and you know you’ll be travelling with valuable items, you’ll likely be given the option of itemising them and increasing the amount you’re covered for in respect of each item.
Claiming and depreciation
Even though increasing your premium might seem like something of a bitter pill, it does come with some extra advantages (beside the obvious benefit of being better covered in the event you make a claim).
With many insurance policies, when taking depreciation into account, it could mean any claim might only result in a payout that’s a fraction of what you actually paid for the item. Depending on the circumstances, if you increased the cover for say, your camera which you bought 5 years ago for $3,000 for its full purchase amount and it was stolen while you were away, you’d be able to claim for the full amount you’d insured it for. If you had other items stolen at the same time that you hadn’t increased the cover for, they’d likely be subject to depreciation.
What if you’re lucky and someone buys you an expensive gift while you’re away?
Let’s say you’ve head away to celebrate a milestone birthday and on the big day you’re given a $5,000 watch. Would it be covered? Depending on your policy – you’ll likely be covered for gifts you’re given or purchases you make while you’re away. However, it’s important that if you have valuables with you while you’re away that you didn’t have before you departed, that you check the sub-limits on your policy, and contact your insurer to discuss your options should you need to increase your cover level. And should you need to make a claim for a gift you’ve received while you’re away, you’ll need to provide proof of ownership, even if it was a gift.
If you need to make a claim …
Of course it would be great if your trip went off without a hitch and you didn’t need to make a claim at all. But should you have to, you’ll need to supply some supporting documents along with your claim. Some of these you can arrange in advance, so it’s a good idea to get as much paperwork in order before you head away. These include:
- Valuation reports
- Original receipts to show proof of ownership
- Product details (make, model and serial number)
If your claim relates to a crime such as theft or a serious accident you should contact the police as soon as possible. In some cases such as theft you’ll need to supply a police report along with your claim.