The baggage "insurance" they never tell you about

Federal regulations require that if an airline loses or damages your luggage or its contents then they are required to pay up to $3300 in compensation when you fly domestically in the US. However, the airline will attempt to depreciate the value of your loss, and will require receipts to prove your claim. (Coverage may  be considerably less for international travel from the US, or from the European Union). Airlines typically exclude coverage for "valuables" and "business effects"--this includes things such as electronics, jewelry, cash, art work, and business related documents and samples.

But for some people--those traveling with Louis Vuitton trunks, Vera Wang wedding gowns, or simply a lot of expensive clothing--$3300 simply isn't enough coverage. That's where something called "excess valuation" (EV) can come in handy. Never heard of this? Well, the airline rep checking your bag at the airport isn't likely to tell you about it unless you ask. So let us explain.

Most US-based airlines will cover an additional $1700 of your luggage contents on top of the Federally-mandated $3300 (they don't call it "insurance" because they're not insurance companies, they're airlines) if you declare excess value when you check your bags. From what we can see, Delta will even cover "valuables" if you buy this extra coverage, the cost of which varies from one airline to another (see chart, below). Depending on airline, coverage may only cover you in the event of total loss, not merely damage, to the contents and not to the bag itself.

Another thing to consider is that if you buy coverage from, say, Continental and then transfer to Delta during your trip, Continental's coverage ends once the second airline takes charge of your bag. You need to claim your bag, in such a scenario, and re-check it with Delta, paying Delta's fees.

You can also buy travel insurance to cover your bags, but many basic policies don't go very far. For example, Access America's Basic Plan covers only $500. Their more expensive Classic policy is good for $1000, and their Deluxe policy for $1500, and the maximum liability for valuables is $500, but only if you can provide receipts.

Some international airlines also sell EV coverage, but their web sites, the most readily available source of information, are either vague or woefully out of date, and good luck calling their toll free reservation numbers to get clarification. Your best bet is to inquire at the airport check in counter or a local sales office before your trip. One international carrier that is more straightforward is Taiwanese-based EVA, which sells EV for 50 cents per $100 declared up to a limit of $2500 in coverage beyond what international law requires. Singapore Airlines, according to spokesperson James Boyd,  has the same coverage limit and cost. Remember, airlines change their rules on a whim, so be sure to check with your airline before take off.