Losing your luggage can be a living nightmare. On top of not having access to your stuff while your traveling, you have the daunting task of filing claims and filling out lengthy reports to look forward to—and even then, the safe return of your luggage isn't guaranteed.
It's no surprise then that more and more travelers are signing up for traveler's insurance—i.e. insurance to cover medical expenses, trip cancellation, lost luggage, flight accident and other losses incurred while traveling—every year. However, what you may not know is there's a pretty good chance you're already paying for lost luggage insurance, via your home or renter's insurance plan.
I did a little digging to find out how common it is for insurance policies to cover belongings lost outside of the home—including lost luggage and personal theft (in your car, on your person) while you're traveling—and here's what I discovered.
Most homeowner's and renter's insurance leaves home with you
According to Bankrate.com, more than half a million pieces of luggage checked by airlines are lost or stolen each year. Fortunately, lost luggage is typically insured under the off-premises coverage clause in your homeowners or renters insurance—meaning your insurance company (and not the airline) will compensate you for your missing stuff.
That is, of course, after you pay your deductible, which can sometimes wind up costing you more than the value of your lost luggage. For instance, if you lost $400 worth of items in a missing suitcase, but you're responsible for the first $500 per your policy, then it might not be worth submitting a claim with your insurance company.
Translation: while your homeowners and renters insurance might more than cover your lost luggage, your best bet is to weigh the cost of your deductible against the value of your stuff before reaching out to your agent.
So, do I really need to pay for traveler's insurance?
If you're thinking about signing up for traveler's insurance in the event you might lose your luggage, but already have homeowner's or renter's insurance, you probably don't need to.
However, if you're hoping to be compensated for medical expenses, missed flights, and other unexpected emergencies during your domestic and international travels, then traveler's insurance is definitely the way to go.
My advice is to call up your insurance agent or review your current policy to find out exactly what kind of coverage you're offered while you're away from home and more importantly, how much the deductible is for your lost luggage. If you're an avid jetsetter, you may very well need more protection than the average homeowner's or renter's insurance provides, but in most cases, you'll be surprised at how well you're already covered.