Friday, March 20, 2009

Baggage Insurance You Probably Didn't Know About

Federal regulations require that if an airline loses or damages your luggage or its contents then they are required to pay up to $3300 in compensation when you fly domestically in the US. However, the airline will attempt to depreciate the value of your loss, and will require receipts to prove your claim. (Coverage may be considerably less for international travel from the US, or from the European Union). Airlines typically exclude coverage for "valuables" and "business effects" - this includes things such as electronics, jewelry, cash, art work, and business related documents and samples.

But for some people - those traveling with Louis Vuitton trunks, Vera Wang wedding gowns, or even just a couple of fancy dresses or designer suits - $3300 simply isn't enough coverage to replace what might be lost. That's where something called "excess valuation" (EV) can come in handy. Never heard of this? Well, the airline rep checking your bag at the airport isn't likely to tell you about it unless you ask. So let us explain.

Most US-based airlines will cover an additional $1700 of your luggage contents on top of the Federally-mandated $3300 (they don't call it "insurance" because they're not insurance companies, they're airlines) if you declare excess value when you check your bags and pay a small fee. According to its Web site, Delta will even cover "valuables" if you buy this extra coverage, the cost of which varies from one airline to another (see chart). Depending on airline policy, coverage may only cover you in the event of total loss, not merely damage, to the contents and not to the bag itself.

Another thing to consider is that if you buy coverage from, say, Continental and then transfer to Delta during your trip, Continental's coverage ends once the second airline takes charge of your bag. You need to claim your bag, in such a scenario, and re-check it with Delta, paying Delta's fees.

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