Luggage loss, theft, and damage are among the most common travel insurance claims, and also among the most commonly misunderstood. Many travellers assume their policy will replace their stolen laptop at full value. The reality is more nuanced.
The Sub-Limit Problem
Your policy might say “personal belongings cover up to AUD $10,000”, but look at the sub-limits (sometimes called “single item limits”). Standard policies typically apply:
- Unspecified items limit: AUD $200–$750 per item
- Electronics sub-limit: AUD $500–$1,500 total for laptops, tablets, cameras (sometimes combined)
- Cash sub-limit: AUD $200–$300
If you have a AUD $3,000 laptop and it’s stolen, an unspecified-item policy may only pay AUD $500–$750, and will depreciate the value for age and wear. The solution: specify high-value items on your policy for full replacement cover at a small additional premium.
Depreciation: How It Affects Your Payout
Most policies pay the depreciated value of stolen items, not the replacement cost. A two-year-old camera that costs AUD $2,000 to replace new might be assessed at AUD $1,200–$1,400 after depreciation. Some policies offer new-for-old replacement for specified items.
What’s Typically Excluded from Baggage Cover
- Items left unattended in a public place
- Theft from an unlocked vehicle
- Fragile items (screens, jewellery) unless specifically mentioned
- Sports equipment (often requires a separate add-on)
- Business equipment (laptops used for work may be excluded on holiday insurance)
- Items not supported by a receipt or proof of ownership
Airline Liability vs. Travel Insurance
When an airline loses or damages your checked luggage, their liability under the Montreal Convention is around AUD $2,700 per passenger. Always file a Property Irregularity Report (PIR) with the airline immediately. Travel insurance and airline liability are separate claims, you may be able to claim from both (though you can’t profit beyond your actual loss).
Is It Worth Having?
For travellers with expensive gear (DSLR camera, laptop, designer luggage), yes, especially if you specify high-value items. For travellers with modest, older luggage and a mid-range phone, baggage cover provides some protection but may deliver less than expected in a claim. Review sub-limits carefully and specify valuable items when you purchase.
