I’ve now read way too many stories about the recently launched AirCare travel insurance product. All of them focus on the potential huge payouts that customers might realize for flight delays or other troubles. And they all manage to ignore one key factor: It is a sucker bet. For $25/trip you can get coverage across five categories of trip interruption. Getting paid out at a level which comes close to recovering the initial investment, however, is very, very unlikely.
Here are the 5 ways you can get paid:
All those $1000 offers seem grand, right? The bad news is that your odds are better at the tables in Las Vegas than with this coverage.
You’re betting $25/trip that something bad is going to happen. And bad things do happen from time to time. But not nearly often enough for most travelers to benefit from this sort of coverage. How many flights are stuck on the tarmac more than two hours? The DoT (and AirCare) know the answer to that question and it is a tiny, tiny number. In March 2014 there were 160 flights with a 2-hour tarmac time out of 503,758 tracked but the DoT. That’s fewer than 1 of every 3000 domestic flights. Do you really think you’ve got the odds in your favor on that bet?
Lost or delayed bags are a similarly rare occurrence, though at 1/300ish more likely than the tarmac delays. Of course, the reported number of claims doesn’t account for bags being delivered within the 12 hour window which AirCare requires before a claim is paid. I’m also skeptical of instant funding of delayed or lost bag claims given that the airlines won’t typically declare a bag lost or stolen for at least 7 days.
Finally, there’s the part where comparable coverage is often available at much lower costs, possibly even free. An AmEx Gold card comes with coverage for lost or stolen bags – up to $500 coverage for checked bags and $1250 for carry-ons – assuming you buy the ticket with the card; no extra premiums are charged. The Chase Sapphire Preferred provides even better coverage, with a 6-hour threshold for delayed bags (paying $100/day up to 5 days) and flight delays over 12 hours get $500/ticket. Sure, the $50 for a 2 hour delay is likely to pay more often than the 12 hour delay, but the likelihood that you’ve actually incurred real expenses for a 2 hour delay is low relative to the longer one and the $50 payout isn’t all that great; very unlikely to be worth betting $25 on for every trip.
You’ve got a better change of winning big by picking up a stack of green chips next time you’re at the casino – one for each trip you plan to insure with AirCare – and placing them on individual numbers on the roulette wheel. The payout is about the same and the odds are much, much better.
AirCare Travel Insurance has a cute name and the promise of instant payments for small inconveniences is sexy. But it is a sucker bet. There are times where travel insurance can be a smart purchase. The scenarios covered by this plan don’t fit into any of those categories. Don’t be fooled.
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You didn’t address the missed connection benefit. That one seems most valuable – not as a gambling game, but to help reduce the true opportunity cost of getting somewhere later than intended and dealing with the rescheduling headache, especially when a hotel night at the destination can no longer be cancelled. Whatever the house odds are, I’d guess that the connections are an expensive scenario many of us have had to deal with — just like the Amex lost baggage insurance which works like a charm factored into the annual fee.
I’m not particularly convinced of the missed connection value proposition. Maybe if you’re booking a lot of crazy mileage runs or something, but most trips are non-stop or single-connect and the misses really are few and far between.
And not worth $25/trip to make that bet IMO.
THIS IS GREAT for flying United, most other airlines…. not so much.
Based on reading this article I suppose I had the wrong understanding of this product. I thought I read somewhere else that this was a trip insurance product, which for $25 would be a bargain, especially if your plans aren’t set or if you’re flying on points. Based on you not covering that topic and a quick visit to their site leads me to believe the only coverage they offer are those you mentioned above, and if that’s the case, I agree with you it’s not worth it.
Am I correct that they don’t offer actual trip cancellation insurance? What about weather delays?
Correct that they don’t offer trip cancellation. I suppose you could claim that such is a 2+ hour delay and get your $50 but hard to know how that works in the rules.
There is no exclusion on the 2-hour delay for weather that I saw in the fine print. But you also cannot wait until the last minute, see that the flight is already delayed and then buy the insurance. I’m sure there is a small window of opportunity in some markets where weather delays can be reasonably predicted (summer t-storms in NYC for an afternoon arrival) but there’s still a bet being made there.
It doesn’t cover you if you get sick and skip a trip though nor if you get sick or injured while on the trip like a traditional travel insurance product might.
Thx for the clarification.
I’m flying this Sunday night with a ~45 minute connection in Philly with a terminal change. If I miss it, then I’m stuck until the next day. I could see it being worth it in these situations.
I suppose it is a matter of reading the fine print, but if it is a legal connection and the inbound is on-time I don’t know that they’d pay, even if you miss it because of the terminal change.
And things may have changed but last time I was in a similar scenario US put me up so I wasn’t out cash anyways. Not much of a need to make the bet in that case if I’m not going to be out cash.
I wonder what happens if I am going to misconnect, but proactively asked the airline to reroute me so I am not stranded? Do I have to purposely misconnect to collect the cash?
A (very) quick glance at the website, it looks like you can buy the coverage as late as an hour prior to departure. It seems like there are times when I know in the morning that weather on the way (t-storms, de-icing) make delays likely, and protecting a tight connection would be a good bet,
Yes, swag, that’s an option so long as the delay has not already posted. And with some regional operators there is the possibility that the formal delay won’t post until well after the departure time even though the inbound is late so it could be something of a “sure thing” bet. But those are very much edge cases, not the norm.
The fine print also excludes buying coverage if there is a “weather warning” at either the airports involved in your trip. I don’t know if that’s National Weather Service only or if FAA-issued warnings for delays/ground holds count.
Thank you for the analysis of this “insurance” scheme. There are a lot out there, and it’s hard to get information that’s helpful to the consumer. I’ve seen what I think is another such scheme: “Emergency Assistance Plus,” which, rather disappointingly, is being breathlessly promoted by AAA (54 million members, they claim), Sam’s Club, NRA (3 million members, they claim), the National Association of Social Workers (strange bedfellows), VFW, the Elks and, apparently, everybody’s brother-in-law.
And they’re A+ with the Better Business Bureau. I guess they paid their dues.
Looking over the AAA materials, I really wonder: What does it cover for only $129 for the whole family for a year?
Well, if you get sick or have an accident they’ll monitor your care (by phone). If needed they’ll airlift you, or send a doctor or specialist (no less) to you. And when you’re better they’ll fly you home. They’ll also replace prescriptions and medical devices you lost, send any ol’ person you want to visit, take care of your kids, grandkids, pets, car, luggage and passport. They’ll even send you back dead. In the US or out.
But, not mentioned at all:
What are the limits for each service? Time and dollars?
Pre-existing conditions? Definition and limitations?
The only way to find out what is the actual coverage is to buy it. There are no consumer reviews of the product; just hype.
Please excuse my diversion.
Hmmm….. It sounds very similar to the “guarantee” that BizTravel.com used to offer free for any trip purchased through their website back in 2000-2001. More than 30 minutes late was a $100 refund, more than an hour late was a $200 refund and more than 2 hours late, they refunded your entire full ticket price.
I booked EVERY flight I took through them ( I was flying from Tampa to Toulouse with usually a stop in Gatwick and/or Paris several times a year) from May 2000 until they stopped the guarantee because of having to pay out on too many claims. Essentially, I flew free that entire time because BA and AF were always screwing up connections.
I doubt if AirCare will run into that problem because it’s only for domestic US flights.
BizTravel is the reason I started flying Continental in 2000. I had a choice between CO and NW between NYC and MSP and NW had better schedules and access to both EWR and LGA while CO was EWR only and fewer flights. But BizTravel didn’t cover NW and they did cover CO.
They were running during the infamous United “Summer from Hell” pilots’ action and definitely paid out plenty even on just domestic trips.
And AirCare says they intend to expand to international eventually, though we’ll see how well that goes.
I agree that if you’re flying a few times a month, then you’re truly gambling. It just doesn’t happen that often. But for regular people like myself, $25 a couple times a year won’t kill you. Last year I languished on the tarmac for several hours at BWI before missing my connection at ORD. If I’d bought AirCare for every trip I took last year (which just wasn’t that many), I’d still have made a profit many times over from that one trip alone. Yes, it’s a crap shoot, but the few times I fly, something always seems to happen.
Sorry, Mary, but that’s not really how stats work for something like this. Each trip is an independent event. You’re not more likely to have troubles because you only fly a couple times a year or because your prior trip did or did not have problems.
AirCare is banking on you not recognizing the math behind the offering so that they make money.
Almost no insurance policy has a positive expectation for the holder; if it did, the insurer would be out of business. Comparing an insurance policy to a casino table is a false equivocation: people don’t get insurance for gains, they do it to protect from loss.
But what loss are you protecting against here? Is a 2-hour tarmac delay somehow going to cost you real money? More than a regular delay??
The big number items are a gamble on getting a windfall, not protecting against a loss. And the options where there could be real costs – things like lost baggage – can often be had for free at a comparable level of coverage.
I travel often with my guitar, and while I try to avoid checking it, I have twice had it left behind or misdirected to the wrong destination when I needed it for a gig the day of travel. In both cases I had to borrow another (with considerable hassle to friends) or risk not getting paid. I would consider spending the $25 for AirCare so that I could instead just get to the nearest guitar shop and buy or rent a replacement.
While I recognize this particular scenario is uncommon, it’s not hard to conceive of others where the potential for loss justifies the up front expense. Just because this product isn’t useful for every flight you take doesn’t mean it can’t be useful for some.
I don’t suppose there’s any trip insurance you DO recommend?
I’m in for that Alitalia US-Israel-EU-Asia trip this November & have had a hell of a time finding anything sub-$100+ (estimated out of pocket for the month: $1K w/hotels & award nights/ flights back)…
I do seem to have extreme weather/carrier/or other event happen whenever I travel & would like to have such additional expenses covered, if needed.
What credit card did you use to buy the tickets? What benefits do they offer?
Are you flying on EU carriers to/from the EU where the laws require them to accommodate you in certain scenarios?
I do recommend having a medical coverage plan of some sort for foreign travel because any health insurance you might have likely doesn’t cover that. I have an annual plan which takes care of my on my trips (and I’m pretty sure the one I’m on has been sufficiently degraded over the years it is no longer as good as it was but it is what I have and I am lazy about finding something new). But the other coverage is highly variable in terms of what is available and what it covered. Just make sure you’re getting coverage for what you actually need rather than paying extra for things which are otherwise already covered.
Used AmexPRG. Not too worried about health (Kaiser covers everything, everywhere), but I am worried about some weather/political /strike / natural disaster happening that will seriously impact & or delay trip. It’d suck losing my award tickets (or having to pay for extended stay somewhere waiting for normalcy again).
Having so many carriers/alliances, multiple/unconnecting airports, politics in TLV/BKK, leaves a lot of ‘what ifs.’
(btw: I’m not a worry sort: I happened to be in Ko Samoui for the Japanese earthquake /tidal wave (no power for over a week on tiny island w nothing to do & no one there; emergency landings; airline strikes in remote villages; hurricanes; white-outs; etc…I just think of it as the spice of life, but gets expensive for hotels & flights when there is no way out & everyone stuck).
Great column, but I have to disagree on two aspects. One of the other posters pointed out that certain airlines on certain flights are chronically problematic. I think you could game the system and optimize your payback if you were a business traveler and knew that for example, JetBlue BOS to SEA on Wednesday afternoons is always late.
More importantly thought, if you’re like me and not an overly frequently traveler any more, this coverage will give you something other travel insurance can’t – A “Win” when you’re miserable and feeling very down on your luck. One of the worst feelings is when you’re on your time, about to begin your one or two real vacations for the year, and the airline blows it. Takes all the wind out of your sails, ruins your mood, and makes you feel just downright lousy. In those cases, I’d be ecstatic if I bought this $25 lottery ticket and “won” something. It would make that $25 the best money I had spent in terms of the lift it would give me to be able to “flip off” the airline, not let them spoil my and my family’s fun, and have an extra bit of extra cash to play with once things were back in order. And if it never pays off, $25 isn’t a lot of money when it’s only four or six times a year.
You can increase your odds if used systematically but I think it is still overall a bad bet. And, quite frankly, the people they’re targeting to buy it aren’t the ones using it systematically.
Beyond that, I continue to disagree that the number of trips taken can make it a smarter buy. For independent events the stats simply don’t work that way.
Ahh the promises that are made by insurance and not kept. This insurance does not provide the fine print that says it is essentially worthless. Look at loungebuddy.com for the threads about how they do not pay out. I had a flight with connections in which the first leg cancelled due to air traffic so I could not make my connection. AirCare says it will not pay my claim!!! Still fighting them, but insurance of this type seems worthless.
@ Seth — for some reason can’t open their site so would you mind answering these two questions:
(1) Do they cover award travel?
(2) With regards to Route Repair, what do they consider a missed connection? For example, if you are flying a one-stop flight and have a short connection, airlines try to automatically rebook you on the next flight of the day if there’s space (at least, that’s what happened to me on the way to & from FTU). So, in a sense, you don’t actually miss a connection because your itinerary is now different but you are forced to spend more time during layover which leads to more expenses. On the way to Seattle, I went from a 50-minute layover to almost 4 hours (thanks, PHX people for closing the gate early!) and on the way back to Houston, I’d had to spend a night on a 14-hour layover since my original flight was the last one for the day (fortunately, I sprinted across two terminals and made a connection to original flight even though Delta had already rebooked me on next morning’s flight).
I guess, what I thinking is that if this insurance covers cases like that, it may be valuable for tight connections. Not a fan of cutting it close but some times things just work out that way.
Reward booking is fine.
As for “what’s the definition of a misconnect?” they didn’t really have much in the way of a definitive answer in the chat session I just had. The agent offered me, “Basically if you miss a connecting flight as a DIRECT RESULT of the previously scheduled flight the insured was ticketed upon being cancelled delayed or diverted, the company will pay,” but was unable to provide a definition of “DIRECT RESULT” despite having capitalized it.
Thank you, Seth! Was trying to price out coverage of a trip from my phone but it couldn’t find my IAH-SLC-SEA flight pair. Turns out that IAH-SLC flight doesn’t exist anymore — thanks for NOT notifying me Delta! *grumbles* At least, got a refund for slightly more than a cost of one-way nonstop on United so it all worked out.
AirCare in your case does not cover the “missed connnection.” It is absurd but they consider that you did get to your destination even though a day or two late! Makes no sense but that is my current experience in asking for payment for cancelled flights causing me to miss my connections twice.
@Landon (I can’t reply above because the thread nested too deep): Yes, you can use the windfall to rent a guitar. Or you can put $25 in a reserve account every time you fly and dip in to that when you need the emergency money. I’m betting you’ll do much better with the latter approach.
They also claim that “Baggage does not include items owned by a business that the Insured has taken on a Trip as part of the Insured’s employment with the business.” If being a musician is a profession for you they might try to play that option.
Seth, you are so right to be sceptical and not trust insurance companies. When it comes to the pay out, the first answer given by AirCare is that the fine print says “No” we don’t cover that.” I can’t even find the policy details and definitions on AirCare’s website and they are making jokes on their FAQ page so I do not think they can be taken seriously. My big issue is regarding cancelled flights leading to missed connections. My claim so far has been denied.
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