What does valuables insurance cover?
When travelling abroad, it is vital to have the right type of insurance to cover any valuables that may be lost, stolen or damaged.
Unfortunately, insurance policies are not always that clear as to how valuables are covered and the amount they are insured for, which can sometimes lead to disputes if they claim arises.
What are valuables
From an insurance point of view, valuables are items high-risk items such as laptops, phones, iPads or tablets, cameras, jewellery, watches, sunglasses and other similar items that would normally be taken on holiday by someone.
High risk in the sense that they can easily be lost or damaged
Valuables insurance does not normally cover very high-risk items that are being transported from one destination to another – this would need to be done under a specific call cargo or specie policy.
Most travel insurance policies will have a separate section for baggage cover.
Some insurance companies will use the section to include valuables as well, whilst other insurance companies will have a separate section for valuables.
This is where misunderstandings can arise
If the baggage section of the insurance policy includes valuables, then there will normally be a cash limit for the baggage section overall and a specific item cash limit, without a need to specify what any of the individual items are worth.
Other insurance companies will have a dedicated valuables section of the policy, where it is necessary to specify exactly what valuable items are being taken on the trip, and what each of them is worth.
Whilst this may seem a bit more intrusive, it is a much better way of making sure that valuables are properly covered and insured, and in the event of making a claim, there is less likely to be a dispute about what the valuables are worth.
The valuable section will normally be different to a section that covers the loss of money, passports, and other important documents.
Making a claim
Anecdotally, many people used to make claims for items they had supposedly lost, like a camera or a pair of binoculars, which it was very difficult to prove either way was true or not.
Insurance companies have tightened up considerably how they adjust claims for valuable items, many requiring back in the event of a claim, the following information is provided :
- Make of item
- Model of item
- Serial number
- Condition of item
- Value – with official valuation provided if needed
- Receipts, when bought etc
- Police report
If a particularly valuable item is bought while someone is actually on the trip or holiday itself, then it is a good idea to notify the insurance company at the time to make sure it complies with the policy terms and conditions.
In the event of any claim, the insurance company will require the individual to have notified the local police, normally within 24 hours.
It is also a good idea to notify the insurance company at the time, ideally by email, even if a full claim it’s not going to be made until the return home.
The small print of most travel insurance policies requires that the individual behaves in a responsible manner at all times, and if this is shown not to have been the case when a valuable item has been lost or stolen, then the claim may be disputed.
Responsible behaviour can obviously be interpreted in different ways but the sort of thing the insurance company like someone leaving a camera on a table while they went to the toilet, and it being stolen by the time they returned.
Also, the use of alcohol and drugs can play a part if the insurance company can show that the individual behaved responsibly or recklessly because of their use.
New for Old Cover
Many insurance companies still use a new for old basis for assessing the value of valuables that may be claimed under a policy. This means that they take into account any wear or tear of the item, how old it is etc,
People normally expect that a valuable item will be replaced as new, and therefore it can come as quite a shock when a significant deduction can be made because of new for old considerations.
This is why it is much better to have a separate valuables section of the policy that specifies high-risk items, with fixed value amounts written into the policy.
It is also worth checking specifically with the insurance company what their basis is for setting claims, whether it is new for old whether they will agree to the valuations in the policy as a basis for settling the claim.
Traditionally, insurance companies would settle any claim by paying the policyholder in cash, which is what people expect, and which many companies still do.
Some however settle a claim by replacing the item itself with a similar item, of similar value to the one that has been stolen or damaged or lost.
This can also be quite a shock to people who would normally prefer cash to give them the freedom to decide how they would like to replace the item.
However the insurance company is perfectly within its rights if it wants to do this, and again it may be worth checking and taking out the policy exactly what the claims settlement basis is, in this regard.