Can I Insure My Miles?

Dear Tim,

I remember reading an article some time ago about being able to insure miles. I have about 500,000 miles with United and want to insure them. Can you please confirm that this is still possible and tell me who to contact and how?

Eian

Dear Eian,

With the recent demise of National Airlines, and the loss of points earned by members of that carrier’s National Comps program, plus renewed concerns about United’s next move, the topic of mileage insurance is again top-of-mind among frequent travelers.

The frequent flyer insurance you’re thinking of is AwardGuard. For more information, visit their site or call 800-487-8893 in the U.S.; or 719-597-8893 from outside the country.

The basic AwardGuard coverage costs $119 for one year or $214 for two years. That buys you $7,500 worth of protection for miles in selected airline and hotel programs, as well as the AmEx and Diners Club programs. And yes, United’s program is covered.

In practice, AwardGuard simply purchases tickets on your behalf, in place of tickets you would have been able to redeem miles for in the defunct program. With each ticket, your mileage balance will be adjusted to reflect the number of miles that would have been required for the type of ticket requested. You continue requesting tickets until you reach the $7,500 coverage limit, or until you have redeemed all miles in your account, whichever occurs first.

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Should you insure your miles?

There are two variables to consider: 1) the likelihood that the program in which you participate will disappear, taking your miles with it; and 2) the value of the miles at risk.

The first question is the most difficult to assess. Will United declare bankruptcy? More importantly, if they do seek bankruptcy protection, will they emerge as a viable company? And how will your miles be affected? Suffice it to say that there is no unanimous answer, even among the savviest industry analysts.

The second part of the question is more straightforward.

Begin by placing a value on your miles. Using the 2 cent-per-mile rule of thumb—with the proviso that your mileage may be different—your cache of 500,000 miles is redeemable for award tickets worth approximately $10,000. That’s what you stand to lose if your Mileage Plus miles disappear.

So, in a worst-case scenario, AwardGuard would “make you whole” for up to three-quarters of the value of your lost miles. Is it worth spending $119 for that protection? That brings us back full circle, to the thorny question of United’s future.

Again, I have no definitive answer to that question. No one does. But if you feel your Mileage Plus miles are in jeopardy, you certainly have more than enough at risk to warrant a year’s worth of protection for $119.

Good luck with a difficult decision!