What Does Checked Baggage Insurance Cover?

Author: Jason Steele / Source: Wise Bread

When you travel by air, it’s only a matter of time until you have this experience. You wait at the baggage claim area as bags arrive until you realize that you’re the only one left standing there. A few stray bags make laps around the carousel, but yours isn’t among them.

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Whatever chance you have left to see your bags that day disappears when the carousel stops turning, and you trudge over to the baggage service area, feeling defeated.

There, you aren’t given much hope as an indifferent airline employee asks you to describe your luggage size and shape, making you wonder what the fancy bar-coded tags were there for in the first place. With a little luck, your bag will be delivered to your home or hotel in a few days. But sometimes, you’ll never see it again. (See also: The Airline Lost Your Luggage. Now What?)

Before this happens to you, you should understand the checked baggage insurance that your credit card offers, as well as other options, and what they will cover.

What the airline will cover

On a domestic flight, federal regulations state that the airlines are liable for $3,500 per checked bag. You’ll have to submit a claim with details of the contents of your luggage, so the amount you’re reimbursed could well be less than that $3,500. Also note that many items are excluded including jewelry, electronics, antiques, cash, and other monetary instruments.

When traveling internationally, the airlines’ limit of liability is set by international conventions. If both countries are signatories to the Montreal Convention (more than 100 are, including the U.S.), liability is capped at 1,131 of an obscure international monetary concept known as “special drawing rights.” In practice, this works out to about $1,600.

Credit card baggage insurance

Among the perks your credit card may offer are two different types of baggage insurance. The most common one is lost baggage insurance. As its name indicates, this coverage only applies when a bag is truly lost, not when it is merely delayed.

The other type of coverage that may be available from your credit card is baggage delay insurance, which is designed to help you temporarily replace necessary items while the airline searches for your bag. (See also: When Is Your Credit Card’s Travel Insurance Good Enough?)