What happens when an airline loses your luggage?

If an airline loses your luggage, there are strict regulations in place to protect you. Here's what you can claim from the airline directly and when you need to go to your travel insurer.

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Travel insurance rules continue to change as a result of the coronavirus pandemic. We’re working hard to keep up and make sure our guides are up to date, however some information may not be accurate during the pandemic. It’s even more important to double-check all details that matter to you before taking out cover. Please know that some policies may not be available through Finder at this time. Here are some helpful tips:
    • If you're buying a policy today, it's unlikely that you'll be covered for border closures
    • If your travel plans go against government advice, your policy will most likely be voided and you won't be covered
    If you’ve ever waited at the baggage carousel until it stops moving, you’ll know that it is by far one of the most frustrating things about travelling.

    But just as you come to grips with the inconvenient fact you are stuck with nothing but your daggy plane clothes, the really frustrating part starts. Who is responsible? What rules apply when you’re travelling internationally? Who will compensate you – the airline or your travel insurance provider?

    What's the first thing I need to do?

    Before you even think about any of these questions, the first thing you should do if your bag never makes it to the baggage carousel is to head to the airport baggage services counter and lodge a Property Irregularity Report (PIR) directly with the airline that operated your flight.

    If your bags were checked through for multiple flights, you’ll need to lodge the PIR with the airline that operated your final flight. In the report, you should include as much information about your baggage as possible, including the colour, brand and any identifying marks. (Pro tip: Take a photo of your luggage before you fly and leave a business card inside your luggage with your number and email address on it.)

    The PIR will also contain a unique reference number that is used by an airline to trace your baggage. You can also use the PIR reference number to check the status of your baggage once it has been located by the airline.

    The PIR isn’t a legal requirement – there may be a reason why it’s not possible to lodge one before leaving the terminal, for example an unmanned desk at a small airport – so you are still entitled to claim without it. However, it is likely to be more difficult.

    If you are unable to lodge a PIR straight away, you should make a report in writing to the airline within seven days.

    What is the airline responsible for?

    An airline is strictly liable if your checked baggage is lost, delayed or damaged, regardless of fault, if the loss or damage airlinestook place on board the aircraft or during any period within which the checked baggage was in the charge of the carrier.

    Where your travel is wholly within Australia with no international sectors, airlines are liable to compensate you under the Civil Aviation (Carriers' Liability) Act 1959 or complementary state legislation.

    For international flights, airlines are governed by two international treaties: the Warsaw Convention of 1929 and the Montreal Convention of 1999. However, for one of the treaties to come into effect, the country of departure and country of final destination must both be members of that treaty.

    For most trips, this will be the Montreal Convention, which has 120 state parties to date, covering everywhere from Albania and Australia to Zambia. In time, the Montreal Convention is expected to apply to almost all air travel.

    The Warsaw Convention will generally apply where the Montreal Convention does not, but it is considered less favourable to passengers, especially when it comes to compensation.

    An airline is not liable if the damage resulted from the inherent defect, quality or vice of the baggage.

    Lost checked baggage is treated as delayed by the airline for the first 21 days. In that time, it is the airline’s responsibility to locate it and deliver it to you.

    In the case of carry-on luggage, including personal items, the airline is only liable if the damage resulted from its fault or that of its servants or agents.

    What compensation am I entitled to?

    For domestic travel, under the Civil Aviation (Carriers' Liability) Act, airline liability for loss or damage is limited to $1,600 per passenger for checked luggage and $160 per passenger for your carry-on.

    For international travel where the Montreal Convention applies, airlines are liable for up to 1,131 Special Drawing Rights (SDRs) per passenger – a form of international money, created by the International Monetary Fund, equivalent to approximately $1,735 – cumulative for both checked and carry-on baggage.

    Under the Warsaw Convention for international travel, airlines are liable for up to 250 francs (about AUD$30) for each kilo of your checked baggage or 5,000 francs (about AUD$600) for your carry-on baggage.

    If you’re travelling with something worth more than the airline’s liability limit, you do have the option to declare a higher value for your luggage and items when you check your bags at the airport. The airline will usually provide you with a higher coverage amount for a fee.

    In this case, the airline will be liable to pay the higher amount in the event of lost luggage, unless it is proved that the declared amount is greater than the actual value of your baggage.

    What about travel insurance?

    Now you might be sitting there thinking, why get travel insurance that covers luggage if your airline is going to providegirl on backpack you with those sweet, sweet 1,131 Special Drawing Rights (SDRs) per passenger? But what happens if there are high-value items in your luggage that are worth more than the 1,131 SDRs covered by the airline? Would you be able to lodge a claim with your insurer for the difference?

    “Yes, if there is a shortfall between what the airline pays you and what the item is worth you can lodge a claim for the difference,” according to Ash Zaman from Travel Insurance Direct.

    “Travel insurers will generally cover all your luggage and personal effects up to a certain amount (eg up to $800 per item). However, they may also automatically cover items such as certain electronic equipment for a higher amount (e.g. up to $4,000 per item),” Zaman explains.

    But don’t just assume you have cover. Sub-limits vary not only from insurer to insurer but from policy to policy. If you’re not sure, ask your insurer.

    High-value items

    Travel insurance will allow you to have additional coverage for valuable luggage and personal effects – such as laptops, cameras and prescription glasses – in excess of what the airline will cover by specifying individual items and paying an additional premium when you buy your policy. However, your travel insurance generally won’t cover you if your laptop is in your checked luggage.

    Cover for essential items

    A travel insurance policy will also cover you for essential clothing and toiletry items bought if your luggage is temporarily lost or delayed (not permanently lost) by an airline for more than 12 hours, up to the policy limit. To claim, you must provide relevant receipts and written confirmation of your claim, including the length of the delay from the appropriate authority.

    Get covered for your luggage

    warning Finally, some good news! Domestic travel is picking up, so some insurers have started offering cover again 🦘
    Just remember, you won't be covered for any pandemic related claims if you do take out domestic travel insurance.
    International travel insurance is limited and sometimes unavailable at this point.

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