To me this type of policy would only really help if the luggage was lost. While I do not recall seeing any policy on the compensation for lost items, these cases are reported to the FBI. I'm sure it happens, but seldom do you hear of someone outright losing a bag. And even if you did, unless you have a case full of Versace, I would think the reimbursement from the airline would cover it. Of course if you have a case full of designer clothing, you can probably afford the insurance without caring about the value.