It pays to review travel coverage

Nation's Business, Sept, 1997 by Hal Morris

Do you think you need special insurance to cover theft or loss of a lap computer, luggage, or credit cards when you're on a business trip?

You may already have more protection than you realize.

Most homeowner's and renter's insurance policies cover, within monetary limits, personal computers and other personally owned items for policyholders traveling anywhere in the world. The amount for which most policies will reimburse a victim is limited to 10 percent of the policy's personal-possessions coverage, less the policy deductible, says Jeanne M. Salvatore, a spokeswoman for the Insurance Information Institute in New York City. For example, $50,000 worth of personal-property coverage typically translates into $5,000 in theft or loss protection when you're away from home. Some policies limit coverage of computer equipment to $5,000.

Coverage for items valued above that amount can be obtained through a personal-articles rider.

Reimbursements under homeowner's and renter's policies typically are based on the appraised value of lost or stolen items, not their purchase prices or replacement costs. Replacement-cost coverage is available, however, and can be purchased for items that depreciate rapidly, such as laptop computers. Replacement-cost coverage is about 10 percent more expensive than actual-cash-value coverage, says Salvatore.

It's important to keep receipts for your computer and related gear in a safe place so you can find them if you need to file a claim.

Concerning lost or stolen luggage, federal rules require that airlines reimburse passengers up to $1,250 per person. Travelers who pay for their tickets with a credit card typically receive additional coverage from the card issuer at the time of the purchase. That coverage at least helps to bridge the gap between what the airlines pay and what the lost luggage and contents were worth. Check with your credit-card issuer to verify this enhancement.

In addition, your homeowner's or renter's insurance might take care of losses not covered by the airlines' reimbursement.

Under federal law, a credit-card holder is liable for up to $50 of unauthorized charges for each lost or stolen card. And the limited liability typically is covered by homeowner's and renter's insurance policies for up to 10 cards, or $500, regardless of the policy deductible.

Missing cards should be reported to the issuers within 24 hours, however. The issuers then block unauthorized transactions, assign new account numbers, and issue replacement cards.

A person who would find it troublesome to record credit cards' account numbers and issuers' phone numbers -- and also find it a hassle to notify card issuers directly if a card is lost or stolen -- can buy a "protection plan" for those tasks, notes Frances Smith, executive director of Consumer Alert, a nonprofit organization in Washington, D.C., that promotes education and choice in consumer matters.

Companies offering such plans charge about $25 a year to maintain a list of the client's credit-card accounts. A client who loses a credit card calls the plan sponsor, which in turn notifies the card issuers of the loss. To find a company that offers such a plan, contact a credit-card issuer.