Baggage Insurance
You are taking so many safeguards through your journey in life for protection against any untoward happening. You take Life insurance policies to protect the nearest and dearest ones against the unforeseen eventuality of untimely death as well as a means of savings for future. Similarly, you take Medical insurance to get hassle-free medical care at hospitals when sick, and you take car and house insurance to protect your assets. But what happens when your baggage disappears while you are on a tour and you get stranded Or if you lose your passport on a foreign soil and do not know what to do next and have to go through the rigors of getting an alternative document without any money. In such an eventuality, a boon comes in the form of Baggage insurance which costs a little but helps a lot.
Before we start examining the various aspects, forms and nuances of a Baggage insurance cover which is offered by almost all non-life insurance companies, we should understand what the term baggage stands for. Baggage, for our purpose, means all our personal belongings which we need during our journey from one place to another contained in a suitcase, briefcase, trunk or any other container accompanying through the journey. In other words, baggage means whatever we carry on travel for personal use. Please remember that for a business traveler, pieces of samples or specimens or dealers stock are not items of personal use and hence excluded from the purview of the policy.
The sum insured or the value of goods carried through a journey for which the policy should be taken should include the present day value of the goods as far as practicable. This is the maximum compensation payable by the insurance company in the event of total loss. The present day market value is the cost of acquisition at which a replacement of the existing item is possible. Any addition to the items of baggage during the period of journey is also covered subject to the maximum limit of sum insured under the policy.
Next step is to understand the different forms of baggage insurance covers which are available in the market. In case of inland travel, Baggage insurance comes in a simple form. It provides safeguard against loss or damage to the accompanied baggage of the insured or his/her family due to number of unforeseen accidental causes like fire, theft, riot & strike, Terrorist activity or any other incident of accidental nature for a specified journey or period. It includes all modes of travel and periodical stoppages en route. It covers the theft from a car provided the car has a central locking system or was locked from all sides at the material time of theft.
Different insurers cover different areas of operation of their baggage insurance policies. You have to choose between host of alternatives depending on the mode of travel, area of travel and the value of your baggage on which the rate of insurance is to be applied to give you the premium amount you pay to the insurance company. Some insurers restrict the cover for inland travel only within the boundaries of a country. In that case, any loss or damage to the accompanied baggage within the municipal limit of the city where the insured lives permanently is not covered as the journey starts after the departure from that station. Some insurers extend the cover to a sub-continent or a group of countries. But in case of overseas travel, most travelers prefer a package policy which covers both the medical insurance and the Baggage insurance with personal liability cover and scope is certainly wider.
Before we further analyze an overseas travel policy clubbed in a package with other covers, let us examine what we cannot cover in a baggage policy. Throughout our discussion we have maintained that the baggage must accompany the traveler and hence any baggage not accompanying the traveler must be insured under a separate transit policy. It should not be included in the baggage policy. The more important items which are not covered under a baggage policy are cash, securities, manuscripts, deeds, bills of exchange etc. and these are to be specially taken care of by the traveler in person. Jewelry and precious stones, fur, watch and similar artifacts are normally excluded but some insurance companies cover them on specific declaration supported by specific valuation whereas some charges additional premium. Articles of consumable nature like stock of food and beverages are also not covered under the Policy. It further may be noted that damage by mechanical derangement or electrical breakdown appliances and breakage of brittle items like glass or china clay wares are excluded from the scope of cover of some policies. Lastly like all other asset policies, depreciation, wear & tear nuclear and war risks are excluded from the scope of this policy too.
If we examine the overseas travel insurance policies, in which Baggage insurance is available in conjunction with other insurance covers, the policy covers the period for which the journey is taken and is not journey specific. The amount of premium also varies on the total period and the amount of maximum compensation payable. In the package policy the cover becomes wider too. The benefits available can be divided into three types. Firstly the policy covers total loss of checked baggage with any carrier. Some insurers restrict it to international Airlines only. So if your baggage is lost during the transit, the amount of loss is compensated by the insurance company. Second cover is delay of checked baggage and a fixed amount is paid for emergency purchase of replacement items for personal use. Third cover is against the loss of Passport which covers the actual expenses incurred in obtaining a duplicate passport or alternative travel documents. The per item limit and overall limit is specified under each of the covers stated above by different insurers. You should check the details before taking out any policy that suits both your needs and pocket.
However detention or confiscation of Passport or baggage by any legal authority like Customs, Police, Immigration Department etc. of the state is not covered under the policy and nothing is paid by the insurers against such an eventuality. Furthermore, loss of Baggage is surely to be reported to the Police authority within 24 hours of the discovery of loss and an official report is to be obtained. This will enable you to get the insured amount from the insurance company.
So you should purchase an insurance policy for your baggage considering various aspects of coverage offered by different insurers, nature of travel like domestic and overseas, mode of travel like by Rail, Road or Air, nature of baggage like personal and business, wider coverage available on additional premium etc. The service mode, especially in case of overseas travel, should also be borne in mind.
Other Articles
