Why does travel insurance need the airline reimbursement for my lost bag?

When your travel insurance is third-party insurance and separate from the airline, you might wonder why the insurance company asks for confirmation of airline reimbursement for a lost bag.

Here’s why: when the airlines lose your bag, the loss of the bag is their responsibility and the company should pay some restitution for your loss.

Some travelers assume that their travel insurance plan will pay a benefit for lost baggage separate from the airline’s restitution, but that would amount to ‘double-dipping’ and that’s not how insurance works.

Once the matter is settled with the airline, your travel insurance company will take over and examine what you lost, what you received from the airline (in the form of a check or vouchers) and then subtract that amount from their payout, sending you the remainder. The amount you receive still may not equal what you lost, but it’s usually more than you get from the airline alone.

If you’re wondering if having lost baggage coverage with your travel insurance plan is worth it given this information, consider the following facts:

1. Reimbursement from the airlines is extremely limited
2. The airline will depreciate the value of the items you lost
3. They have long lists of items they won’t cover – even if the loss was their fault
4. Items over a certain limit must be accompanied by the original receipt with your claim

The lost baggage coverage you get with a travel insurance plan is intended to reimburse you at replacement value (not depreciated value), including the bag you lost.