Travel insurance for expensive items

Travel insurance is designed to help you out if things don’t go as planned. The Australian Government’s Smartraveller website even describes it “as essential as a passport”. Without travel insurance, you could be left with significant out of pocket costs in the event of illness or injury while overseas.

Sometimes when travelling, we also need to take expensive items with us. For example, taking a laptop for work purposes or taking an engagement ring to propose to your significant other while on holiday. In these cases, you may need to consider travel insurance for expensive items.

What does travel insurance cover?

Travel insurance can help cover costs associated with medical treatment, theft or loss of your baggage, travel documents and other items and cancellation or delays, among other things (depending on the policy).

However, all travel insurance policies have a range of limits that apply to different kinds of claims, such as a cap on the amount of money you can claim back if something you take with you is damaged, lost or stolen. So if you’re wanting to take expensive items with you when you travel, what are your options? Well, that depends on what items you want to take with you, how much they are worth, where you’re travelling, and how you would like to insure those items.

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What insurance options are available to cover your expensive items?

Here are some of the options available to help insure expensive items with travel insurance:

1. High-limit travel insurance policies.
2. Single item travel insurance, listing specific expensive items, and relevant add-on cover to travel insurance policies.
3. Stand-alone insurance policy (not travel insurance) for a specific expensive item that includes ‘worldwide’ cover.
4. Portable contents insurance policy as an add-on to your contents insurance policy that includes ‘worldwide’ cover.
5. Credit card cover (if your card has this option) with worldwide cover.

Don’t forget that there could also be an excess that you have to pay when you go to make a claim, which could impact the amount of money you would be paid out if you were to make a claim against your policy. As with any insurance purchase, it can be a good idea to read the Product Disclosure Statement (PDS), Target Market Determination (TMD) and any other important documentation.

It could also help to find out whether or not an insurance provider considers depreciation (such as the age and state of the item) when assessing claims, rather than just the purchase price. Insurance providers may also consider a replacement or repair cost, and pay the lesser of these amounts, which could be below the purchase price. This could make a big difference to the potential payout if you have to make a claim.

Are there options for domestic travel insurance for expensive items?

So, will your choices for travel insurance for valuables be different if you’re travelling locally versus abroad? Insurance choices are generally similar if you plan on travelling within Australia or overseas. Of course, you may not necessarily be required to have ‘worldwide’ cover on your portable contents insurance or single-item insurance if you’re only travelling a short distance from your home. However, if you’re planning a long Australia wide trip away from home or are intending on travelling large distances within the country, you may need to check with your provider if specific items are still covered. Read the PDS, TMD and other important documentation too.

Related: Domestic travel insurance

Travel insurance for high-value items

1. High-limit travel insurance policies

Travel insurance policies typically cover luggage and personal effects up to a certain claim limit. A ‘claim limit’ is the maximum total amount of money you can claim back if something you own is lost, stolen or damaged while travelling.

This type of insurance is often just for ‘unspecified items’, which are luggage and personal effects that aren’t listed on an insurance certificate with an agreed sum insured amount. Unspecified items can include things a provider believes a traveller may typically take with them on a trip, such as cameras and mobile phones. There may also be ‘sub limits’ that apply for different types of products. The limits apply regardless of the value of a particular item.  So, it’s important to note that the list of unspecified items might not cover every item that you may want to take with you, and might not cover up to the full value of each item.

A hypothetical example may help to illustrate how this type of insurance works:

Samantha is going to Los Angeles and she’s purchased a travel insurance policy that includes up to $20,000 in ‘unspecified items’ cover. There are sub limits in that cover that put a cap on what she can claim per item, including:

• $3,000 for camera equipment and personal computers.

• $1,000 for mobile phones.

• $750 for an unspecified item or set (including jewellery).

Samantha takes with her:

• a camera she recently purchased for $2,999,

• a $2,000 laptop computer,

• and two rings valued at $2,000 in total.

Even though the total value of Samantha’s items add up to less than $10,000, the claim limits per item may prevent her from claiming the full value of the items if they were lost. According to the conditions of her policy, she could claim the camera as a $2,999 single item and the laptop as a $2,000 single item, as they are both under the ‘sub limit’ per item for that category ($3,000).

Her rings, however, are valued over the single-item claim cap of $750. They may be considered a ‘set’, too, by the insurance company. So Samantha could be at risk, if her rings were lost, of only being able to claim $750 (or $1,500 if they were deemed not a ‘set’) of the $2,000 value.

Also, she discovers that her insurance provider does not cover the software on the computer, which could cost up to $500 to reinstall on a new laptop, which she would have to pay herself.

The above example shows why it’s a good idea to know:

• The value of the individual items you are taking, either via a proof of purchase receipt or valuation certificate.

• The total of the ‘unspecified items’ cover in your policy.

• If any ‘sub limits’ apply and in which categories.

• If your items are above those sub limits and the total benefit limit.

• If the level of insurance is enough to cover every item’s value if everything you’re taking with you was lost, stolen or damaged.

If this type of insurance falls short, a traveller may consider taking on a more expensive policy with higher benefit limits and sub limits, or a policy that allows ‘specified items’ cover. It’s also worth talking to your provider and confirming what will and won’t be covered.

Which insurance providers have the highest standard cover limits?

Canstar’s expert Research team reviewed policies on our database to find examples of policies that offered the highest standard cover limits for unspecified items.

Highest standard item cover limits in travel insurance policies on Canstar’s database – examples

← Mobile/tablet users, scroll sideways to view full table →

Source: www.canstar.com.au – 23/10/2024. Based on public travel insurance products on Canstar’s database. *Refers to the maximum combined amount payable for replacing luggage and personal effects lost or damaged per single policy. Excludes multi-trip policies. Table sorted by international and domestic policies, then in descending order based on personal item cover limit amount, then alphabetically by underwriter, then alphabetically by provider. Read the PDS and terms & conditions before purchasing a policy.

2. Single item travel insurance, listing specific expensive items, and relevant add-on cover to travel insurance policies.

Some travel insurance providers offer cover for specific items, as well as the option of ‘adding on’ insurance and/or increasing claim limits for these specific items (usually for an extra cost). This is when you tell the insurance provider what expensive items you’re taking with you, hence the ‘specified item’ policy description, and the provider agrees to cover those items up to a certain value (and with certain conditions).

Insurance providers tend to have different rules about what can be specified, and under what conditions you could make a claim for these specific items. For example, a travel insurance provider may not allow bikes, musical instruments or watercraft (except surfboards) to be specified. Jewellery could also be excluded from the same provider’s list of high value items consumers can get higher coverage for (for a higher premium). Across policies, there can also be different claim limits and sub limits applied to specific items too.

Also each provider will likely require proof of ownership and value, which could be in the form of an original receipt of purchase or valuation certificate, but make sure to check the PDS and TMD to confirm.

Canstar’s Research team explored the travel insurance providers on our database and found 58 offered add-on insurance for specified or valuable items, with 91% of policies offering this type of cover at no extra cost. There are often additional costs when increasing the claim limits for these policies though.

Which insurance providers offer add-on insurance for valuable items?

Canstar’s Research team reviewed providers on our database to find examples of policies that offered the highest cover limits for specified items.

Highest specified item cover limits for travel insurance  – examples

← Mobile/tablet users, scroll sideways to view full table →

Source: www.canstar.com.au – 23/10/2024. Based on public travel insurance products on Canstar’s database. *Refers to the benefit limit for the highest available specified high value item. Excludes multi-trip policies. Table sorted by international and domestic policies, then in descending order based on specified item cover limit amount, then alphabetically by underwriter, then alphabetically by provider. Read the PDS and terms & conditions before purchasing a policy.

3. Stand-alone insurance policy (not travel insurance) for a specific expensive item that includes ‘worldwide’ cover

Some insurance providers offer cover for specific high-value items. This is not part of a travel insurance policy; instead, this type of stand-alone insurance policy only covers the item insured. Some of these policies include ‘worldwide cover’, which means you’re able to travel with the item and it will be covered if it’s lost, damaged or stolen. Conditions and exclusions will apply, including things such as where you plan to travel to and what you plan to do when you’re there, so check your PDS, TMD and other important documentation to find out what’s covered, as well as when and how you can claim.

For example, you can insure:

• High-value jewellery with a dedicated jewellery insurance policy.

• Mobile phones with a dedicated mobile phone insurance policy.

4.  Portable contents insurance policy as an add-on to your contents insurance policy that includes ‘worldwide’ cover

When you take out a contents insurance policy to cover the items in your house, it’s typically possible to add on a type of insurance that covers these items when you leave the house, for an added cost. Some providers offer portable contents insurance as a separate product, while others include it as a standard feature of contents insurance policies.

Generally, this type of policy insures items that regularly leave your address with you, such as handbags, laptops, musical instruments or sporting equipment. It can also cover items on you, such as glasses, jewellery or clothing.

Portable contents insurance typically provides cover for your personal items for theft, accidental loss or damage while you’re away from home anywhere in Australia or New Zealand. Some policies may extend this cover to other countries when you’re travelling for a certain period of time.

The policies could have:

• Unspecified item cover for items covered by the provider in your policy, up to a certain limit per policy and per item type.

• Specified item cover for items you ask the provider to include on your policy and for which you will receive cover (up to a certain limit).

At the time of writing, the vast majority of policies listed on Canstar’s database provided either of these options, but only a small number included this type of cover as part of their standard offering. There were also a few policies where this type of cover was not available.

However, to work out whether or not you might be covered, you need to read the PDS, TMD and other relevant documentation. You may also like to think about questions such as:

• Where can you travel and be covered? If ‘worldwide’ cover is included, what countries does the policy cover and are there any specific geographic exclusions?

• What items are included automatically in the policy? Can you add on other items? How much are the items covered for? How does this stack up against the value of the items you want to take away?

• How do you make a claim? What proof of ownership and value do you need?

• Do you need to tell the insurance provider if you’re going to travel with the items, such as on an overseas trip or an extended Australian holiday?

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5. Credit card cover (if your card has this option) with worldwide cover

Some credit card packages include a range of insurances, such as:

• Travel insurance – which could cover claims made for loss, theft or damage of expensive items (up to the claim limits and sub claim limits) while travelling domestically or overseas, depending on the card and the type of insurance.

• Purchase protection insurance – which could cover loss and damage of items purchased using the credit card, but may have exclusions. For example, travelling with the item or buying the item overseas may be excluded.

• Extended warranty cover – extends the cover of the manufacturer’s warranty of specific items purchased using the credit card, which may help if you’re travelling with an item that stops working or breaks while travelling.

Canstar’s Research team examined the credit cards with travel insurance available and found examples of some of the highest standard item cover limits.

Highest standard item cover limits for travel insurance offered with credit cards

← Mobile/tablet users, scroll sideways to view full table →

Source: www.canstar.com.au – 23/10/2024. Based on personal credit cards on Canstar’s database that offer complimentary travel insurance, excluding interest-free cards. *Refers to the maximum combined amount payable for replacing luggage and personal effects lost or damaged per single policy. Table sorted in descending order based on personal item cover limit amount, then alphabetically by underwriter, then alphabetically by provider. Read the PDS and terms & conditions before purchasing a policy.

These policies may provide cover for your valuables while you’re travelling, but there could be exceptions, exclusions and coverage limits.

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Common exclusions, exceptions and limits – credit card travel insurance

Some common exclusions, exceptions and limits for credit card travel insurance are:

• A condition that you need to pay for a certain amount of travel costs on the card before you go on your trip.

• Time limits on travel.

• Certain excluded items (like sporting equipment).

• The inability to purchase extra insurance for more expensive items, or to extend cover above the value limits listed in the policy.

• What is considered a ‘pair’ or a ‘set’, which could impact the value that you could claim as a number of things (such as a camera, tripod and lens). This may affect what can be covered under one claim value cap.

• Whether or not you have to report the theft or loss of valuables to the police or an authority at your destination, and the time limit in which you must do so.

Typically, it costs more to have a credit card with this type of insurance cover included. This type of coverage is usually offered with credit cards as part of a package deal (e.g. rewards credit cards).

As with all financial decisions, it’s a good idea to read and understand the PDS, TMD and any other important documents given to you by financial institutions and providers.

What are some exclusions for travel insurance for high value items?

As with any insurance claim, if your provider deems that you have been negligent or acted irresponsibly with your belongings, they will more than likely deny your claim. There are some other common exclusions such as:

• If you leave belongings unattended, including in a vehicle and have not made an effort to conceal them or secure them in a safe compartment.

• If you fail to report lost or stolen items to the relevant authorities (such as police) as well as to your insurance provider within an appropriate time frame.

• If you were found to be under the influence of alcohol or drugs when your belongings were lost, stolen or damaged.

• If the item/s you’re claiming for do not have associated receipts or proof of purchase.

• If you lose your mobile phone or have it stolen and you cannot supply its IMEI (International Mobile Equipment Identity) number.

It’s important to check with your provider to see what exclusions apply to your policy.

Cover image source: Stella_E/Shutterstock.com