A European Union court has declared that the frustration and pain of losing one's luggage is not enough to force an airline to pay more than the established compensation limits. The maximum price for your lost or damaged luggage, including your emotional grief, stands at €1,134.71.

The Montreal Convention establishes a limit for compensating passengers if luggage is damaged or lost. That cap is set at 1,000 Special Drawing Rights (SDR) – a pseudo currency used as a unit of conversion against other currencies. The 1,000 SDR amount currently is equivalent to €1,134.71 (US$1,464.13). Keep in mind that these are the upper passenger compensation limits for lost or damaged suitcases and airlines are not obliged to automatically pay the highest amount. The burden of proof of value falls on the passenger.

The court ruling stemmed from a lawsuit brought against Spanish low-cost airline Clickair in which a passenger demanded €2,700 ($3,432) for a lost bag and €500 ($635) for non-material damages resulting from the loss. At question was the applicability of the term "damages." Was this limited to the physical property lost or did it include emotional distress and other non-material suffering? The commercial court in Barcelona where the case was heard referred to an earlier ruling by a Spanish provincial court that had interpreted the limits to be separate for each type of loss – 1,000 SDR for material damage or loss and another 1,000 SDR for non-material damage. However, the presiding judge disagreed with that interpretation and referred the question of collective or separate liability to the EU Court of Justice. That court issued a statement declaring that "...the term 'damage' in the Montreal Convention must be interpreted as including both material and non-material damage..." With interpretation at hand, the Spanish court can now rule on the case.

It's worth repeating that airline passengers should never carry high-value items in their checked luggage. We should travel with the expectation that one day we will suffer the frustration of a missing or damaged piece of luggage. Know the airline's conditions of carriage and its baggage liability limitations and carry this information with you. If your bag is lost or damaged, file a claim with the airline as soon as possible. Many airlines have a finite window for accepting liability claims. Most airlines do not cover the loss of jewelry, electronics and other high-priced items. If you feel that your items are worth more than the airline's liability limits, ask about purchasing excess valuation from the airline or check the coverage you have through the various IAPA insurance plans as well as your homeowner's or credit card plans. It may be a good time to review what you have or may need.

Always note the contents of your baggage and the cumulative value of your items before you begin your journey. In fact, take a picture of your contents with a digital camera which electronically notes the date and time. Just remember not to pack the camera in the suitcase when you're done. One of the worst things you can do is claim items that were never in your luggage or greatly exaggerate their worth. If the airline eventually locates your bag and checks its contents, you may be giving up more than just your pride. You may lose your rights to any compensation.

Note: IAPA membership includes varying levels of baggage protection depending on where you reside. Check www.iapa.com/insurance for more information.