In the U.S., air travelers are legally entitled to compensation if they are denied boarding on an overbooked flight or if an airline loses their luggage. The law favors airlines over consumers in most other cases, however, as airlines are not required to compensate travelers for delayed flights, canceled flights, or resulting expenses related to delay and cancellation. However, in cases of denied boarding and loss or delay of baggage, airlines are required to compensate passengers.

The amount of compensation to which you're entitled depends on a flight's location and fare price. In the U.S., you can get up to $1,350 for a canceled flight. To learn more about maximum compensation payouts and airline refund policies, check out the rest of our guide below.

Am I Eligible for a Flight Delay Refund?

You may be eligible to receive compensation if your flight is significantly delayed. This is largely dependent on the policy of your airline, as the law does not require airlines to pay passengers who are inconvenienced by a delayed flight. Airlines are also not required to pay for any extra expenses caused by the delay or cancellation of a flight—including hotel accomodations or rental cars—and they do not have to reimburse you if a delayed flight forces you to miss an event or connecting flight.

However, most airlines grant fare refunds if your flight is canceled or delayed by more than 60 to 90 minutes, even on nonrefundable tickets. In these cases, airlines are likely to give you a refund in the form of a travel voucher, which comes with restrictions, rather than cash. If you would rather not cancel your trip, you'll likely be placed on the next available flight to your destination without compensation for the inconvenience. Airlines may be able to place you on another company's flight to your destination, so check with the gate agent to see if this is an option.

In the U.S., travel law is ambiguous about whether airlines must compensate passengers for delays. The Department of Transportation's website says, "Whether you are entitled to a refund depends on a lot of factors—such as the length of the delay, the length of the flight, and your particular circumstances." For example, you're not eligible for a refund if your flight is delayed by weather, political unrest, an airline employee strike or any other security risk.

Flight Compensation in Europe: EU Regulation 261/2004

If you're traveling to, from or within Europe, you have a better chance at getting compensated for a delayed flight. The European Union passed a regulation in 2004 in order to protect consumers from poor airline treatment. This regulation stipulates that airlines departing from EU airports or flying into EU airports must compensate passengers for flight delays over two hours, cancellations or denied boarding from overbooking.

EU Flights: Maximum Compensation by Flight Type

Passengers who are eligible for compensation are able to receive between 250 and 600 euros for delays and cancellations, depending on the length of the delay. Compensation eligibility begins once a flight is delayed by more than three hours, which is measured by the scheduled time of arrival. The regulations in Europe are more strictly enforced—so if you encounter a delay or cancellation when traveling abroad, be sure to follow up with the airline and request compensation.

Compensation If You're Denied Boarding

If you're denied boarding on an overbooked flight, airlines must either compensate you or put you on a flight that arrives within an hour of your original arrival time. If your airline can't arrange alternate transportation that arrives within this window, you can get a refund worth up to four times your original fare. Below, we've broken out the amount of compensation you're entitled to based on the arrival time of the alternate transportation arranged by your airline.

The compensation chart above applies to flights that are within the U.S. or that depart from the U.S. and land in another country. Airlines are legally required to reimburse you in the stated amount, so it's important to reject flight voucher offers that are worth less than what you're entitled to. In addition, airlines must compensate you even if you purchased a nonrefundable fare.

Compensation for Baggage Delay or Loss

Under U.S. law, you are entitled to compensation from an airline if your luggage is delayed or lost when you arrive at your final destination. Airlines are required to cover up to $3,500, and this usually excludes the value of your jewelry and other valuable items. If you're traveling with expensive goods, it's always a good idea to purchase travel insurance or pay for your trip with a credit card that has travel insurance.

To get a refund, you must file a lost-bag claim with the airline as soon as you find out that your bag is missing. If you leave the airport without submitting a report, you may lose your chance to get reimbursed for the lost bag. Above all, it's important to remember that the outcome of your requested refund is dependent on airline policy—and how employees decide to interpret that policy. When requesting a refund, it's always in your best interest to be clear, concise and polite.

How to Get Compensation

Airline negligence is common, but receiving compensation for poor service is rare and hard to finesse. If you experienced an incident that's eligible for compensation, you can increase your chances of getting a refund by following the steps outlined below. It's important to note that while there are legal regulations that apply to all airlines operating in the U.S., the rules for compensation on some issues may vary according to airline. Research your airline's policies on delayed flights, loss of baggage or poor in-flight treatment.

1. Don't leave the airport.

If your flight is delayed or another eligible problem arises, you should immediately speak to an airline representative in the airport where you're currently located. In all cases, you should file a claim with your airline before you leave the airport. Specifically for claims of lost or delayed baggage, the airline can potentially invalidate your complaint if you leave the airport before filing.

2. Talk to the gate agent.

Your first point of contact after deciding to make a complaint should be with a customer service representative stationed at the gate of your flight. In some cases, agents at your departure airport may say that they are not responsible for handling claims. Even so, if you have a legitimate reason to be compensated, it's important to insist that the customer service representative file your claim. This is important in case you need to follow up with the airline in the future (which is more than likely).

3. Take to social media.

You may have a better chance getting an airline's attention by tweeting a complaint rather than sending an email. Airlines are careful about managing their reputations, so many will quickly rectify wrongdoings once they are made public. This particularly applies to any issues that are related to customer service, as these types of incidents have the biggest potential to go viral and create negative press for the airline. If you take this route, be sure to mention the airline in your tweet and encourage your network to retweet.

4. Follow up with the airline.

After filing your initial complaint at the airport, it may be some time until you hear back from the airline. Always follow up. Your first complaint could have been drowned out by others or, more likely, ignored by the airline. It's worth it to send a second, third or fourth email to explain your situation and get your message across. Start with friendly and direct language, but don't be afraid to adjust your tone accordingly if the airline is not cooperative. Sometimes companies respond better to a stern voice than a conciliatory one.

5. If all else fails, use a compensation service.

There are a variety of companies that specialize in filing claims with airlines and winning money for delays and cancellations. If you're not comfortable negotiating with an airline, or if the airline is being unresponsive to your request, these companies will advocate on your behalf. These companies usually focus on European markets and will take a 20% to 30% cut of the money they win for you. Two of the most notable and successful companies that do this work are Claim Flights and AirHelp.