My PSP Was Stolen by a Continental Baggage Carrier

My/my son's PSP was stolen out of my luggage on my last business trip by one of their baggage handlers and they aren't going to replace it or reimburse us! Let me make one thing clear, I only travel with carry on luggage. I was told I had to check my carry on luggage at plane side because of the size of the plane they were using. The PSP was in my carry on when I went through Security, it was in my bag before I got on the plane, and it wasn't when I got home. I immediately filed a claim when I unpacked my bag (and noticed that the carrying case was left in my bag, but the PSP and all of our games were gone...they even left the charger). On November 13th I received a letter stating that "electronics are among the list of items excluded from our limits of liability." So of course, I called to complain. Their customer service rep had the nerve to tell me, "Well sir, you should have kept that with you." SERIOUSLY? That ticked me off! I asked him to let me speak to someone that would reimburse me for the item that was stolen and told him the $125 certificate (or e-voucher) doesn't even cover the $350 for the PSP and games that were stolen. His response was, "We didn't even have to give you anything sir!" A week later and I'm still livid about it. They will reimburse me for the PSP and the games that were stolen. On top of all this, my 4-year-old son wants to play the PSP, when I told him it was gone, he said, "It's okay, daddy, Santa will bring you a new one!"