Airlines warned on limits for lost bag payments

Transportation Department says existing policies violate federal rules

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updated 7:29 p.m. ET Oct. 9, 2009

WASHINGTON - Airlines shouldn't be too cheap when it comes to helping customers whose bags are lost.

The Transportation Department said Friday airlines can't arbitrarily limit reimbursement for travelers who have to replace necessities when bags are lost or delayed.

The department noted that several airlines have policies saying they'll only reimburse passengers for necessities purchased more than 24 hours after they arrive without their baggage. They also limit payments to outbound trips, meaning customers foot the bill for replacing items lost on the flight back home.

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The agency said those policies violate federal rules requiring airlines to cover all expenses caused by lost or delayed baggage up to $3,300 per passenger on domestic flights.

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The Transportation Department said it would monitor the situation for 90 days and then take enforcement action against airlines that don't comply. Last month, the agency said it would fine Spirit Airlines up to $375,000 for a number of violations, including delaying payments for lost bags, only paying for bags lost on outbound legs of round trips, and only reimbursing passengers for expenses incurred at least 24 hours after their bag was lost.

Airlines usually spell out their policies in the contract of carriage on their Web sites. For the largest six U.S. carriers — Delta, American, United, Continental, Southwest and US Airways — their policies clearly state they will cover up to the legally required $3,300.

Information about reimbursements for necessities such as toiletries is often contained in printed handouts from ticket agents or other airline employees.

Officials for American, Southwest and JetBlue said they were in compliance with the Transportation Department notice. Representatives of other carriers said they were studying the department's order.

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