WORKING WITH REWARD MILES
For all of our frequent fliers out there who may be purchasing flights with reward points or frequent flier miles, travel insurance is still an option. In some unique cases, a plan may include a specific benefit dedicated to covering the cost of redepositing the miles or rebooking fees, but one would not be able to include the face value of the miles in the trip cost.
So what is insurable when using frequent flier miles to fly? Non-refundable fees and taxes associated with the miles. Most flights are a little more than we expected, when you add in baggage fees, state and federal taxes and other miscellaneous fees. All of these are insurable.
Also, any money you are required to spend (that is non-refundable) to make up the difference in ticket price can be covered. For instance, you have accumulated 5,000 miles, however your trip will require 8,000 to book. You’ll need to purchase the additional 3,000 miles in order to book the flight, so that cost is insurable. Just remember to save any receipts showing the amount you paid out of pocket for the additional miles.
Just be careful calculating miles into the total cost of your trip. Travel insurance will typically cover the cash value of non-refundable travel expenses — in other words, money you can’t get back from your airline or other travel provider. Frequent flyer miles are often not covered as it is difficult to determine their cash value. However, should you be able to confirm their cash value through the rewards program they use, then most certainly, insuring these would be an option.