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New Aircare Program for the Traveling Gambler

by on June 2, 2014 · 14 comments

in Travel Industry, Travel Insurance

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Air travel is full of pitfalls like missed connections, flight delays, lost baggage, and cancellations (this past winter actually saw the worst cancellation record in U.S. aviation history), and while travel insurance and airline policies, government regulations, and credit cards offer compensation for some of them, a fleet of loopholes could leave you stranded on the proverbial tarmac.

Enter AirCare, a new fixed-benefit plan from Berkshire Hathaway Travel Protection (a subsidiary of Chairman and CEO Warren Buffet’s Berkshire Hathaway, Inc.) that now offers travelers the ability to get insured for some of the most frustrating aspects of travel.

But is it worth it?

berkshire-hathaway-travel-protection-logo

Priced at $25 per trip, AirCare coverage pays:

  • $1,000 to travelers for tarmac delays of more than two hours
  • $1,000 for lost or stolen baggage
  • $500 if a flight delay causes a traveler to miss a connecting flight
  • $500 for baggage delayed more than 12 hours
  • $50 for any flight delays over two hours

As long as you’re 18 years or older, you can purchase AirCare up to one hour before your scheduled departure, if the flight has not already been delayed and if there’s no inclement weather at either the origin or destination. Additionally and at no cost, you can modify a policy to accommodate your own changes to your itinerary.

Once you connect AirCare to your PayPal account or bank account and enter your flight information, it automatically tracks your flight and immediately pays you in the event of flight delays and missed connections. You can easily track your AirCare plan via an app for either iPhone or Android, and for extra help with hotel reservations, rental cars, alternate flights, etc., AirCare includes travel assistance through MyAssist, a global-assistance and concierge service.

Benefits of Berkshire Hathaway's Air Care flight-protection plan include payouts for flight delays, lost baggage and missed connections

Benefits of Berkshire Hathaway’s AirCare flight-protection plan include payouts for delays, lost baggage and missed connections.

AirCare’s benefits are cumulative, which means that the plan pays you (in theory) even if multiple mishaps occur at once; for example, if your flight is delayed on the tarmac for more than two hours and you miss your connecting flight as a result, you’ll be paid $1,550. The $500 paid for a missed connection can help you pay for a hotel room if you’re stuck overnight (an expense that’s rarely covered by airlines, credit cards or travel insurance policies).

But how often are flights really delayed? Now that the FAA can fine airlines up to $900,000 for lengthy delays, chances are incredibly slim that you’ll be able cash in on what this policy offers. Airlines are more likely to cancel your flight altogether, as they did this winter due to inclement weather, in which case AirCare offers no coverage.

AirCare claims that it offers to immediately pay you for lost, stolen or delayed bags ($1,000 for lost or stolen bags, or $500 for baggage delayed over 12 hours), simply upon receipt of a photo of your baggage claim form and without requiring receipts or depreciating the value of the bags’ contents. This compensation is ostensibly in addition to whatever you might eventually collect from your carrier or any other pertinent policy. AirCare’s offer of immediate payment is questionable, however, as customer claims are still subject to audit delays and major U.S. airlines are rarely willing to officially report baggage lost or stolen until at least seven days have elapsed.

The $500 payment for delayed baggage might be a potentially worthwhile feature for people who often book connecting itineraries and check their bags on Southwest Airlines. Due largely to the fact that Southwest doesn’t charge baggage fees and is willing to accept bags late for check-in, the carrier has had the U.S.’s worst track record for baggage delays in both 2012 and 2013. This outlook may improve within the next year or two, though, as Southwest upgrades its baggage sorters and equipment at its major airports. Other carriers with unimpressive track records of baggage mishandling over the last couple of years are American and United.

Baggage coverage similar to AirCare’s – or even better – is offered by some credit cards. For instance, the Amex Premier Rewards Gold card provides up to $500 for checked bags, up to $1,250 for carry-ons, and up to $250 for high-risk items like jewelry, as long as you paid for your trip with the card, can produce the receipt, and fill out Amex’s claim form. Chase Sapphire Preferred, on the other hand, covers your carry-ons for up to $3,000, requires only a six-hour threshold for delayed bags (as opposed to AirCare’s 12-hour delay threshold) and pays $100 a day for up to five days, and flight delays of over 12 hours that require an overnight stay are eligible for a $500 reimbursement. Again, you must have paid for your entire trip with the card in order for this coverage to be applicable. It’s important to note that AirCare doesn’t require you to pay for your trip with only one card in order to be eligible for coverage, and that payments from credit card baggage coverage are rarely immediate, as the claim review process can take up to a week or more.

Be aware that AirCare is presently available for domestic flights only, and is not yet valid in Alaska, California, Florida, Illinois, Kansas, Maryland, Massachusetts, Minnesota, New Hampshire, Ohio, Oregon, Virginia, or Washington state. However, Berkshire Hathaway Travel Protection is working to eliminate these limitations, and it sounds like only a matter of time before AirCare gains acceptance in all 50 states, as well as internationally.

Overall, AirCare doesn’t seem like a necessary product, especially if you already have coverage via a credit card or travel insurance policy. However, if you’re the kind of traveler who likes to gamble at the slot machines in the Vegas airport, you may wish to test your luck and gamble on AirCare, even if the odds of a big win aren’t in your favor.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • Shawn

    The interesting question is whether you can find a flight that is delayed a lot, and book a short MCT. E.g., DCA-JFK-BOS on AA, which has a MCT of 35 minutes. A ten minute delay out of DCA (not that rare on a summer afternoon, where thunderstorms are common) and bam you get $500.

  • Hank

    I got lucky. I bought a policy recently just to see the limitations, and I ended up missing a connecting flight. They quickly resolved my claim and I received a $500 check! However, they are not yet ready to make instant payments, as described, but they are working on it. Overall, I was impressed.

  • Dyna

    This seems too vulnerable to what is known in the insurance world as “adverse selection”. For instance, I have an upcoming flight on United (!) with a 32 minute connection in Denver. If the flight is delayed at all I’ll miss that connection. Seems worth a $25 gamble. If I had a long layover I wouldn’t even consider the product.

  • Joey

    Gosh darn it TPG… Was I the only one who though this might be an article on table games coming to flights. . . : – |

  • Bradley

    I bought a policy today and missed my connecting flight. Got the approved claim text for $500. This is great!

  • Toby

    How do you find flights that are often delayed? I’m interested in trying this out

  • Michel

    Any flight from SBA to SFO in later June or mid July is a bet I will take

  • Rajesh Shah

    Not available for purchase in all states yet.

  • Shawn

    YOu can go to flightstats and look at historical on-time performance.

  • Linda Erdely Pierce

    Flying from smaller airports with more than one connection offers a pretty good chance to miss a connection or be delayed. I’ll be very happy to get $50 for spending $25.

  • Paul

    If I am reading the policy details correctly, cancellations ARE covered for missed connections and the 2 hour delay rule if you can’t get on another flight within two hours. Is this incorrect?

  • Sam

    They changed their policy — now the minimum published connection time they’ll cover is 51 minutes!

  • Heartlight3

    What does it mean when it says it is not valid in certain states? That you can’t purchase it there? Or that it doesn’t pay if the delay or missed flight occurs there?

  • Shawn

    Looks like they changed their terms from “up to an hour prior to departure” to “24 hours in advance”

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