If your airline loses your luggage, will your credit card come to the rescue?

By Emma Lunn

After hours in the air, you've finally reached your holiday destination, but your bags have not. Luckily, your credit card may reimburse you for the last-minute supplies you need to buy while waiting for your bags -- or even for all the contents if your luggage is lost permanently.

"Lost or stolen money, baggage and possessions is a common problem for Britons on holiday," says David Barrett, travel insurance manager at Sainsbury's. "When you consider any expensive items you may have in your baggage such as watches or cameras, incidents of lost or stolen baggage can be very expensive if you don't have travel insurance."

Coverage for your luggage
Some credit cards include travel insurance, which, in turn, includes baggage cover. Although travel insurance may be included with a card at no additional cost, coverage doesn't come free. That's because many of the cards that include it tend to be on the more exclusive end of the benefits spectrum -- meaning they'll likely have an annual fee and be out of reach of those without good credit. lost-baggage

The baggage cover section of a credit card travel insurance policy will come with a number of terms and restrictions. Typically these will include how long baggage must be delayed before the policy pays out and how long it's missing for before it's considered "lost."

When it comes to replacing items when your luggage is delayed, some policies cover only clothes and toiletries you immediately need to continue your trip, and you'll be expected to pay for these on your credit card wherever possible. Others have more extensive coverage, covering a portion of your more expensive items.

Keep in mind -- luggage coverage isn't an excuse to be careless with your belongings. To have your claim accepted, you'll be expected to take "reasonable care" of your possessions and not leave them unattended in public places.

Cards that offer coverage
Cards that have full travel perks such as baggage coverage are rare. Here is a sampling of some cards that do offer baggage protection -- and some of the things they do and do not cover.

Sainsbury's Gold Card:
Annual fee: £60

The Sainsbury's Gold Card covers lost or stolen personal baggage up to £1,500. Yet within that limit are other restrictions. Individual items are covered up to a limit of £300 each, and coverage for all valuables is limited to £500. If you had cash in your bag, only £300 will be covered.

Aside from the coverage maximums, there are a number of exclusions. Stolen luggage is covered only when it's in the care of the airline, on your person or locked in a safe or in your room. If you leave items unattended at the airport, beach or other public place, you won't be covered.

In the event that your baggage or possessions are stolen, you'll need to report the theft to the police within 24 hours and get a police report to present to your card issuer. If your baggage is lost by an airline, you'll need to obtain a Property Irregularity Report (PIR).

Other notable exclusions include glasses and contact lenses, equipment used for business, bikes and other sports equipment

NatWest Black MasterCard:
Annual fee: £250

This card covers delayed and lost luggage, but only for the outbound trip. So if your luggage is lost or delayed on the way home from holiday, you won't be covered.

Luggage delayed four hours of more is covered up to £350 -- for emergency purchases. After 48 hours, the luggage is considered lost, and coverage jumps by £2,500 (to £2,850 total). If you need to buy items because your luggage has been delayed, you'll need to do this within four days of arrival and keep the receipts.

If valuables are stolen, the policy will pay up to 30% of their initial value, subject to a single-item limit of £500.

British Airways Premium Plus American Express Card:
Annual fee: £150

This insurance policy includes £750 for baggage delayed by an airline for six hours and an additional £1,000 for extended baggage delay (48 hours). Like the NatWest Black card, this one covers only the outbound leg of a trip, not the way home.

Any items cardholders replace because their luggage is lost or stolen must be paid for on the card -- which could be tricky, as American Express is not as widely accepted as MasterCard or Visa.

Again, you must take reasonable care of your luggage and obtain a Property Irregularity Report if the airline loses it.

Marks & Spencer card:
Annual fee: £180 (for Premium Club membership)

Those who have an M&S credit card can pay £15 a month (£180 per year) to be in the Premium Club, which includes travel insurance.

Under the policy, lost or stolen baggage is covered up to £2,000, with a single item limit of £250 and a limit for all valuables of £500. Emergency purchases for delayed luggage are covered up to £150, as long as the baggage has been delayed at least 12 hours.

If not in the care of the airline, baggage and possessions aren't covered unless locked in a safe or in your room. They also won't be covered if you leave your bags on show (in other words, not in the trunk) in a car, or leave them in a car (even in the trunk) overnight. Contact lenses, hearing aids, valuable jewellery and sports equipment aren't covered.

There is a £75 deductible per claim (up to a maximum of £150 over all claims from a single incident). If your bag was lost by an airline, transit company or hotel, you must obtain a written confirmation to submit with your claim.

See related: Is payment protection insurance right for you?, Editor's pick: Travel rewards cards with no annual fee

Published: 7 June 2012