How can you avoid having your luggage lost and what should you do if it goes go astray?
Here are some tips:
Don't check luggage
The most obvious answer is to not check luggage at all. Pack light. OK, you can't pack light. Read on.
If you can't pack light enough to fit everything in cabin luggage and you must check luggage, then at least avoid connecting flights whenever possible since each connection ups the chances of a lost bag.
Make sure it's tagged properly
When checking your bags curbside or at a counter make sure the agent or skycap has put the correct destination tag on your bag.
Ship your luggage ahead
Another strategy is to ship your luggage 4 or 5 days ahead of your arrival to your final destination (assuming you're not going from place to place). Especially if you have heavy or oversized bags that would otherwise incur a hefty airline baggage fee this might actually end up costing less. Other advantages: the shipping company lugs the luggage, not you; and UPS and FedEx have a better record at getting packages where they're going than the airlines do. Plus, should something go wrong, at least you'll get your shipping charges refunded and an apology and shipping companies have much better tracking capabilities than the airlines do. Costs are surprisingly low. Shipping a 52 pound bag from Phoenix to New York via FedEx Ground using 5 day service costs about $68, including insurance of up to $2000 ($5000 in insurance would just be $20 more); the same bag on US Airways: $15 for the first bag fee, plus $65 because it's over 50 lbs for a total of $80. Shipping an oversized suitcase (over 62 total linear inches) of the same weight costs the same via FedEx but and extra $100 on USAir (that's $360 round trip!). See our baggage fee chart.
You can also bring your suitcase to the US Post Office (you don't even need a box for it; in fact, you don't even need a suitcase if you're staying in one place when you arrive--just put your clothes and other possessions in a box and save on shipping costs).
Addresses on the inside too
Do remember to put your home and "away" addresses both inside and outside the suitcase. Those flimsy address tags the airlines hand out for free fall off easily.
What protection can you buy?
You're already covered for up to $3300 per trip on domestic flights thanks to new DOT regulations, but beware: the airlines will try to depreciate the value of your suitcase and its contents (if you claim $2500 of value they might only pay $1500), and will not cover a range of "valuable" items such as electronics, cash, and jewelry unless you buy excess valuation (see below). So never check these things unless you're sure you're covered.
Keep all receipts
Also, whenever you buy something, be sure to keep the receipts, because the airlines will ask for them to assign a value to your loss. No receipts and you may be out of luck.
Most airlines sell excess valuation insurance, which you can buy when you check yours bags. See chart.
Most travel insurance also covers lost or damaged luggage, but there are limits and exclusions, and you should always read the fine print to avoid unpleasant surprises.
Homeowner's insurance a last resort
Yes, your homeowner's insurance may cover lost luggage, but beware: your insurer may up your premium or cancel your policy. (I once merely inquired about filing a claim, and Allstate refused to renew my policy, even though I never filed the claim!).
What to do if your luggage is lost?
File a claim with the airline's baggage office immediately, before leaving the airport. Gather receipts (you did save them, right?) and hope for the best.