It happened to us on NW last year, after connecting through DTW. Missed our connection and our bags sat in the airport for a few hours. Our video camera was stolen out of our suitcase. As is often the case, the camera was easily replaced. The video tape of our baby's first steps etc. was lost.

NW told us the same thing--video equipment is not covered. In fact, if you look at the list of items they exclude, it essentially covers just about anything thieves would probably want to steal (they weren't too interested in my khaki pants and/or boxer shorts, which were passed over by the bums but ARE covered in case of theft).

I have no suggestions for a favorable resolution, just a suggestion for the future: don't check anything of value, even if your bag is locked. Carry it on board or ship it separately.