Correct.To clarify, did your interpretation originate from a Wikipedia article perchance?
Lost baggage
The Montreal Convention changes and generally increases the maximum liability of airlines for lost baggage to a fixed amount 1,131 SDR per passenger (the amount in the Warsaw Convention is based on weight of the baggage). It requires airlines to fully compensate travellers the cost of replacement items purchased until the baggage is delivered, to a maximum of 1,131 SDR. At 21 days any delayed baggage is considered lost, even if the airline delivers it after that period.