AA "lost" my bag to London one year (flight canceled, bag didn't make it on my new flight, took AA 2 days to figure out how to put my bag on another plane). When it arrived 3 days later it was completely destroyed - retractable handle pulled out and bent in half, multiple tares, missing wheels. You'd think it had fallen into a wood chipper. When I picked up the bag from Heathrow they brought it out and said, "ummm... your bag didn't look like this when you checked it in, did it?" Ya, it was that bad they acknowledged it on the spot. The bag was several years old and only about $130 at the time. I sent them the link to the page (eBags) of the same bag and they paid the full replacement cost. I was actually surprised how easy it was.

Only disappointment was they wouldn't cover my cab fare to go back to LHR to retrieve the bag, and a couple other small expenses I incurred due to the lost bag. I was catching another flight 2 hours after the bag arrived and I didn't have time to wait for delivery. I needed to run back to the hotel to shower, clean up, and put on fresh clothes for the first time in 3 days.

That was the last time I ever checked a bag.