Your £600 iPhone may be worth just £100 if you claim for it on travel insurance – but your home cover could pay up in full

When you take out a travel insurance policy, aside from looking at the medical coverage and how much it might pay for delays, cancellation or lost luggage, how often do you check its cover for valuable items?

If you’ve not checked this in the small print you are risking losing out if something goes wrong as data shown to This is Money reveals that many policies have big gaps when it comes to valuables.

In fact, 97 per cent of single trip policies and 87 per cent of annual policies would not cover an item worth more than £500 for its full value.

You can use your contents policy to cover valuables if it’s worldwide with personal possessions

Of the 922 single trip policies available, 36 per cent provide a total amount of £200 or less for all of your valuables, while 12 per cent provide between £401 and £500 and three per cent have a cover limit of more than £500.

This includes not just watches and jewellery, as gadgets like smart phones, laptops and tablets are also usually found within this category.

Worryingly, five per cent of all policies have no cover for valuables so if your items went missing, were damaged or stolen you wouldn’t be able to use your travel insurance to claim them back.

The figures for annual travel insurance policies are very similar, as you can see from the tables below. The reason they are slightly higher is because a number of premium annual policies are included in the data which tend to have higher cover limits.

The majority of policies also make a deduction from the final sum paid for ‘wear and tear’ which could knock a significant amount off the total.

The example shown to us from Defaqto looks at a £600 iPhone. If the phone is lost but there’s a limit of £200 for valuables, the most you’ll be able to get back is £200 – less than half the phone’s value.

TOTAL VALUABLES COVER FOR ANNUAL AND SINGLE TRAVEL POLICIES

Limits Single trip policies Annual trip policies No cover 5% 5% £200 or less 36%33%£201 to £300 34%32%£301 to £400 10%9%£401 to £500 12%13%£501 to £750 2%3%£751 to £1,000 1% 1% More than £1,000 0%5% Source: Defaqto

The insurer may then take 25 per cent off for wear and tear, which is another £50, and also charge an excess of £50 for the claim, bringing the total amount down to £100.

But instead of using your travel insurance to claim for lost, stolen or damaged valuables, it may be worth claiming through your home insurance policy instead.

For around £20 a year you can add on what’s called ‘personal possessions’ to your contents policy which allows you to extend the cover of your items when you have them outside of the house.

As long as the policy has worldwide cover you can then claim on it if your valuables get lost, damage or stolen while on holiday.

Cover gaps: 97 per cent of single trip insurance policies won’t fully cover items worth £500+

The limits are usually much higher, around £1,500 for single items, so you’re likely to get more of your money back this way. It’s also worth checking your phone is included as some policies may require you to specifically tell the insurer about the model and make.

Brian Brown, head of insight for banking and general insurance at Defaqto, said: ‘We are aware that a small number of travel insurance websites have started offering gadget cover policies alongside any travel insurance policies they sell, however these are not true gadget cover and so we don’t include them in our gadget insurance comparisons.

‘They also (in our opinion) often represent poor value for money, compared to full cover through a home policy.

‘Most customers with valuable items would actually be better off insuring them through their home insurance by buying ‘personal possessions away from the home’ cover.

‘Under home insurance the single item limits are usually much higher (typically £1,500 or more), and claims are paid on a ‘new for old’ basis, less the excess.’

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