How Much Does an Airline Pay for Lost Luggage?
Up to $3,800 for US domestic flights. Up to roughly $1,700 for international flights under the Montreal Convention. But airlines apply depreciation and exclude electronics, jewellery, and cash.
For flights within the United States, airlines are liable for up to $3,800 per passenger for lost, damaged, or delayed baggage under US Department of Transportation regulations. For international flights covered by the Montreal Convention, the liability limit is 1,288 Special Drawing Rights, approximately $1,700 USD at current exchange rates, according to the US Department of Transportation's official consumer protection guidance updated in 2024.
These are the maximum amounts. What airlines actually pay is typically lower.
Why airlines pay less than the maximum
Depreciation. Airlines calculate the value of lost items based on their depreciated value at the time of loss, not their original purchase price or replacement cost. A laptop purchased for $1,200 three years ago may be valued at $400 for claim purposes. Clothing purchased five years ago may be valued at a fraction of its original cost.
Excluded categories. Most airline contracts of carriage specifically exclude liability for electronics, cash, jewellery, medications, fragile items, and perishable goods placed in checked baggage. These exclusions are buried in the fine print of the contract you agree to when purchasing a ticket. If your lost bag contained a camera, a laptop, or prescription medications, you may receive nothing for those items regardless of the total claim amount.
Documentation requirements. Airlines can reduce or deny claims where passengers cannot provide receipts, purchase documentation, or a detailed item list. Most travellers do not carry or retain receipts for clothing and personal items.
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The domestic vs international difference
The $3,800 domestic limit and the $1,700 international limit are separate regulatory frameworks that do not interact. The Montreal Convention, the international treaty governing airline liability for international flights, sets its own limits that are lower than the US domestic limit. If you are flying between two countries, the lower international limit applies regardless of which airline operates the flight.
Notably, wheelchairs and other assistive devices checked on US domestic flights are not subject to the $3,800 liability cap. Airlines must cover the full original purchase price of damaged or lost assistive devices on domestic flights, according to DOT's Air Carrier Access Act requirements.
The claim process that affects what you receive
The liability limits represent the ceiling. Getting there requires:
- Filing a Property Irregularity Report before leaving the airport
- Submitting a written claim within 21 days for international lost baggage or 7 days for damaged baggage
- Providing documentation of the bag's contents and their value
- Negotiating with the airline's claims department, which will apply depreciation and exclusions
Airlines are not required to pay the maximum amount automatically. The actual settlement depends on documentation quality, the specific items claimed, and the airline's internal claims process. Travel insurance often covers the gap between what the airline pays and the actual replacement cost of lost items.
BLS data on how often this happens
In February 2026 alone, US airlines mishandled 220,100 bags, 0.55 per 100 enplaned passengers, according to the US Department of Transportation's Air Travel Consumer Report published in May 2026. That figure was up from 199,142 in February 2025, meaning the mishandling rate is getting worse, not better.
For the full breakdown, read the complete gotaprob analysis: Airlines Routinely Damage and Destroy Luggage and Make the Claims Process So Painful That Most Passengers Give Up.
Sources
- US Department of Transportation — Lost, Delayed, or Damaged Baggage consumer guidance, $3,800 domestic and Montreal Convention international limits — https://www.transportation.gov/individuals/aviation-consumer-protection/lost-delayed-or-damaged-baggage
- US DOT Air Travel Consumer Report May 2026 — 220,100 bags mishandled in February 2026, year-over-year increase — https://www.transportation.gov/sites/dot.gov/files/2026-05/May2026ATCR.pdf
Go deeper
Airlines routinely damage and destroy luggage and make the claims process so painful that most passengers give up