Lost Luggage No Longer a Lost Cause

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Lost luggage has always been a gray area for airlines who don’t want their passengers seeing red. Some will compensate travelers fairly and some won’t.

While it used to be that compensation varied by airline and route arbitrarily, new rules put into place by the Department of Transportation in June have sweetened the pot for air travelers.

For what was once an offer of up to a couple hundred dollars for the inconvenience, domestic travelers can now claim up to $3,000 per person for a lost piece of luggage. If two travelers share a bag, they can claim up to $6,000, the DOT says. It’s one way that the government hopes to strengthen passengers’ rights vis-à-vis the airlines.

Don’t expect the airline to pay right away, of course. Most will wait at least 24 hours before issuing you a check, so if you need clothes, deodorant or shaving cream, you’ll pay out of pocket for those goods right out of the gate. Just remember to keep your receipts.

Keep in mind, though, that airlines have some rights, too. To claim the real big bucks, travelers definitely need to produce a line-by-line list of the items that were lost. In some cases, you may even need to produce a receipt for big purchases like jewelry or laptop computers.

Even when you do, airlines are allowed to operate on a “depreciating value” basis – if you lose a laptop that you paid $2,000 for in 2008, then the airlines have the right to pay you the current (depreciated) value, which could be 50% or less of the original price.

But if airlines don’t play ball and compensate you fair and square, they face heavy fines from the DOT; this happened to both Spirit Airlines (for $375,000) and Delta Airlines (Stock Quote: DAL) (for $100,000) this year.

Aside from negotiating with an airline, your best bet may be to buy some travel insurance in advance of your flight. Chances are, you won’t get full value for your lost luggage from the airline, but travel insurance can pay 100% of the loss.

For a good primer on travel insurance, start here. A ballpark estimate for the amount of insurance you may need is about 5% of the total cost of the trip, according to the site.

Negotiating with airlines over misplaced baggage doesn’t need to be a lost cause. Know your rights, get full value, and hold airlines responsible for your luggage.

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