Can I Insure Frequent Flyer Award Tickets?

Dear Tim,

I have two first class frequent flyer tickets on Delta to Europe next year. Is there an insurance company that will insure the ticket portion? Each ticket is worth $4,500 according to Delta. Help!

Rick

Dear Rick,

Congratulations on earning enough miles for two first-class award tickets.

Also, I commend your foresight in booking so far in advance. As many frequent flyers have discovered to their great disappointment, award seats to Europe during the peak summer season are hard to come by. By planning your trip almost a year ahead of time, you successfully snagged a very desirable reward.

Two thoughts on your dilemma…

First, among the U.S. airlines, Delta is one of the least likely to fall victim to the problems currently affecting the industry. They have neither the crushing overhead, which dragged US Airways into bankruptcy, nor the long-festering labor problems, which may push United into bankruptcy as well.

Having said that, next summer is a long way off, and it’s always possible that the industry generally, or Delta specifically, will be staggered by some unpredictable event or combination of events. After all, on September 10 of last year, who could have imagined what trials and tribulations the next 12 months held in store?

There is indeed a service that insures frequent flyer miles and award tickets, AwardGuard. For $119 a year or $214 for two years, unused miles and award tickets in selected programs will be protected, up to a maximum value of $7,500. Delta’s SkyMiles is one of the covered programs, so this would work for you.

Should you insure your tickets? If Delta’s future were in doubt, I’d say $119 was a small price to pay for the protection and peace of mind AwardGuard affords. As things stand today—September 16, 2002—I think it’s an unnecessary expenditure.

I’d suggest you file away the AwardGuard information for now and monitor Delta’s condition in the coming weeks and months. If the airline shows signs of accelerating weakness between now and your scheduled trip, revisit the AwardGuard option. If not, you will have saved enough money for dinner for two at a three-star restaurant during your trip.