Can a bus or train company limit its liability for lost baggage?

What the Law Says

New York law and federal regulations govern how common carriers like buses and trains may limit liability for lost or damaged baggage. These rules require transparency, reasonableness, and timely notice to passengers.

Under New York Transportation Law § 164, a common carrier operating within the state 'shall not be liable for loss of or injury to baggage beyond the amount actually sustained, unless a greater value is declared in writing by the passenger at the time of check-in.' This means carriers can cap liability—but only if the passenger is given a fair opportunity to declare higher value.

Federal law also applies to interstate rail carriers. The U.S. Department of Transportation enforces 49 C.F.R. § 1035.2, which sets a default liability limit of $250 per passenger for checked baggage on trains—unless a higher value is declared in writing before departure.

For motor carriers (e.g., Greyhound), the Federal Motor Carrier Safety Administration (FMCSA) permits liability limitations under 49 C.F.R. § 373.101, provided the terms are 'fairly and reasonably communicated' and do not violate public policy.

Statutory Text

No common carrier shall be liable for loss of or injury to baggage beyond the amount actually sustained, unless a greater value is declared in writing by the passenger at the time of check-in.

— N.Y. Transp. Law § 164 — Baggage liability

Statutory Text

The maximum liability of a rail carrier for loss of or damage to checked baggage is $250 per passenger, unless a greater value is declared in writing prior to departure.

— 49 C.F.R. § 1035.2 — Baggage liability limits

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