Three Situations Where Your Travel Insurance Claim Will Be Denied

Know your limitations under these common situations

If your luggage comes out like this, it may not be covered by your travel insurance policy. Sorry about your luck.
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Travel insurance plans offer many modern-day adventurers the peace of mind that, should something happen while traveling, recovering costs from their situations will not be one of their biggest concerns. According to the U.S. Travel Association, 30 percent of American travelers are now buying travel insurance to protect their next big trip. While travel insurance can cover a lot of things that could go wrong, there are also certain situations where a policy simply can't help.

By understanding the key limitations of a travel insurance policy, travelers can make sure they don't get left stranded by loopholes in the system. Before filing a claim, make sure the situation doesn't fall into one of these situations.

Luggage lost due to personal negligence

It happens to every traveler at least once in their lives. They've either forgotten to grab those headphones they left in the seat-back pocket, did not pick up a camera from under their seat, or simply left a jacket in the overhead compartment when they deplaned. Or perhaps a piece of luggage ended up confiscated after that friendly person in the seat across forgot to keep an eye on it. A travel insurance plan will cover pieces lost in these situations, right?

Unfortunately, many travel insurance policies do not cover items that are lost or confiscated. In these situations, an insurance provider will assume that a traveler would take reasonable measures to keep personal effects under their control. Should an item get left behind on an airplane, or a traveler loses supervision of their items in a public place, then their travel insurance policy may not cover associated losses.

But what about a more extreme situation - such as an item being confiscated by the Transportation Security Administration? Under these circumstances, travelers may be able to file a claim with the TSA ombudsman for their loss, but travel insurance may not cover everything. When purchasing a policy, make sure to understand how these unique situations may affect the ability to file a claim.

Electronic items checked to a final destination

Many savvy travelers know to keep their small, personal electronics in carry-on luggage as they travel. However, not all personal items will fit in the cabin luggage allowance. In this situation, some travelers may opt to check electronics to their final destination as luggage. If something should happen, a travel insurance policy could certainly pay for it under the lost or damaged luggage clause - or so many travelers think.

Many travel insurance policies spell out very clearly what is covered under luggage loss and damage policies. Often covered in these situations are the usual and customary expenses from the travel insurance policies, including daily expenses for lost clothing and personal items. However, plans often cut the line at fragile, valuable, or heirloom items. Electronic items, including computers, often fall into this category. If an electronic item were to get lost or stolen in transit as checked luggage, then there is a good chance it would not be covered under a travel insurance policy.

If an electronic item has to be transported as checked luggage, then it may be time to consider shipping the item instead of taking it to the airport. Shipping via a mail or parcel service offers travelers more protection, including tracking and supplemental insurance if the item gets lost or broken. Otherwise, travelers who pack their electronics with their luggage run the risk of having a claim denied if something goes wrong in transit.

Claims already paid out by a travel provider

Travel insurance is designed to assist with expenses that a travel provider is not directly liable for. International treaties and regulations have spelled out very clearly that common carriers are liable for a number of situations travelers face, from routine delays to lost luggage.

In these cases, a travel provider may be responsible for paying out a claim first and foremost. As a result, travelers may be referred to collecting from their carrier first and foremost before a travel insurance claim can be honored.

While travel insurance can be a major benefit to travelers, it may not be enough to cover these three common situations. Before buying a travel insurance policy, make sure to understand what situations are covered and what may be denied at the end of a trip.