Those and other changes, which the airline called "substantial," are the result of a two-week internal probe of the April 9 incident, video of which went viral.
Passenger David Dao was pulled from his seat and dragged off the full plane by airport security in Chicago to make room for airline crew.
The 69-year-old doctor suffered a concussion, and a broken nose and teeth, according to his lawyers.
After initial missteps in which they appeared to at least partially blame Dao, the carrier and its CEO Oscar Munoz apologised repeatedly and launched the internal review to find out what went wrong.
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"Our policies got in the way of our values and procedures interfered with doing what's right," Munoz said in a statement announcing the results of the review.
"This is a turning point for all of us at United and it signals a culture shift toward becoming a better, more customer-focused airline," he said.
"There was ambiguity (on the maximum cash offer) under our previous policy, which is why we are changing it moving forward," United spokeswoman Maggie Schmerin told AFP.
The crew on Flight 3411 had only offered $1,000, the report said.
United also has begun reducing overbooking -- the practice of selling more tickets than seats on a plane to account for no-shows -- on certain flights "that historically have experienced lower volunteer rates," Schmerin said.
Without enough volunteers to take later flights, airlines are forced to involuntarily "bump" passengers off overbooked flights.
"It is our goal to reduce involuntarily denied boarding to as close to zero as possible," Schmerin said.
Other changes include a new customer service team to find "creative solutions" for passengers whose flights are disrupted or overbooked -- solutions such as flying to alternate airports and using ground transportation.
United was not the only airline to announce changes, as the dragging incident and its aftermath reverberated throughout the industry.
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