Do the passengers get reimbursed based on the luggage if it wasn’t recoverable? How would airlines know the cost of the luggage on the flight it it crashed (people made it out, luggage stayed on plane)?
When you booked your ticket with the airline, you agreed to accept their valuation of luggage, unless you claimed that it was worth more than that, and paid the charges for that.
So if your luggage gets destroyed, the airline gives you the specified amount of money.
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