For packet video, information loss and bandwidth limitation are two factors that affect video playback quality. Traditional rate allocation approaches have focused on optimizing video quality under bandwidth constraint alone . However in the best-effort Internet, packets carrying video data are susceptible to losses, which need to be reconstructed at the receiver side. In this paper we propose loss aware rate allocations in both group-of-block (GOB) level and macroblock level, given that certain packets are lost during transmissions and reconstructed using simple interpolation methods at the receiver side. Experimental results show that our proposed algorithms can produce videos of higher quality when sent over lossy Internet.