Does Your Personal Insurance Provide Protection When Travelling?

Does Your Personal Insurance Provide Protection When Travelling?

By |2020-07-15T02:19:58-06:00March 5th, 2018|
Lori Jim Sunset2

Jim & Lori on beach in Florida

With Jim & Lori heading to Mexico this month, it seems a perfect time to discuss how your insurance covers you when traveling, especially internationally. Experiencing a loss on vacation is bad enough, but to find out that you don’t have coverage could cause the most easygoing person to lose their cool. Here are three of the biggest exposures and how your personal home or auto insurance would respond.

PROPERTY LOSS:

If you have a homeowners or renters insurance policy, your personal property is covered while it is anywhere in the world. Personal property would include your clothing, luggage, cell phone, laptop, books, and whatever else you pack for your travels. It also would include items that you pick up during your vacation such as a leather purse in Italy or a cuckoo clock in Germany. Keep in mind that your deductible will still apply and the loss has to be due to a covered peril. For example, theft or fire is covered, but accidental breakage is not, so be sure to pack well.

Certain items have limits under the home policy. Theft of jewelry that is not individually scheduled on your policy is limited in the amount that will be paid. Some limits start as low as $1500, but it does vary by policy. Also, many people carry a large sum of cash when travelling, making them prime targets for pick-pocketers. Cash, along with pre-paid cards, gift cards, bank notes, etc., are difficult to prove value at the time of the loss. Therefore, your policy will also have a limit on loss of cash or similar items and that limit could be as low as $250.

PERSONAL LIABILITY:

Personal liability coverage not only protects you if someone is injured at your home, but can follow you in other situations as well. Let’s look at a couple examples. You and your friends are on a golf trip in Scotland and your drive hits a fellow golfer in the temple causing a brain injury. Maybe your family decided to rent a small boat to go for a leisurely cruise around the lake. Before you got out of the marina, you got a little confused on the throttle and drove right into the dock causing damage to the dock, the boat you rented, as well as other boats still docked.

Under your homeowners or renters policy, your liability coverage may cover these situations. These losses could also exceed the liability limit on your home policy. Purchasing an umbrella policy, providing anywhere from $1,000,000 to $10,000,000 of additional liability coverage, can be very helpful and offer great peace of mind for minimal premium.

RENTAL CAR:

This question is one of the most common we receive: you are heading out on vacation and plan to rent a car so you want to know if your current auto insurance will cover you. Since each company can vary, we definitely recommend you give us a call to discuss your specific policy. In general, your liability coverage extends to a rental car used for pleasure (not a business trip) in the U.S., its territories, and Canada. If you have comprehensive and collision coverage on your personal vehicle, this will likely extend to a rental car as well, with a few limitations. However, if that rental car is in France, Belize, or even Mexico, you likely have no coverage provided by your personal auto policy.

For international rental cars, you will want to make sure that liability coverage is included through the rental car agency. Damage to the rental car is available in a few different options. The rental car agency will likely offer this coverage, commonly called Collision Damage Waiver (CDW) for an additional cost. If you are purchasing travel insurance, you may be able to include CDW in your travel insurance package. Many credit cards will provide coverage if you pay the entire rental car cost on that credit card, but be sure to talk to your credit card company and learn their limitations. Finally, Safeco provides coverage for the rental car damage worldwide if you have either the “Superior” or “Ultra” level of coverage on your policy.

Depending on where you obtain the collision damage coverage (including from your personal auto policy), you may not have coverage for loss of use or diminished value of the rental car after an accident. Loss of use is charged to you when the rental car is in the shop for repairs and, therefore, cannot be rented to another party. Diminished value is claimed when the rental car agency indicates that the resale value of the rental car is lower now that it has been in an accident.

CONTACT US FOR HELP:

Again, coverage really does vary by policy so please contact us with your specific travel situation.  We can review your policies to determine what coverage does apply and what coverage you need to purchase elsewhere.  You can call us at 303-232-3100 or find your agent’s email address on our Contact Us page.

Source: autoeurope.com has lots of great resources if you are planning a trip to Europe. I specifically liked their guide, “Renting a Car in Europe.”

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