When purchasing trip cancellation insurance, determining which trip costs to include can often cause confusion for travelers. If travelers are using frequent flyer miles or rewards points to fund a portion of their trip, it can even further complicate the process.
What is not covered?
Unfortunately, frequent flyer miles or reward points are not insurable. This means travelers who use miles or points are not able to insure the face value of their tickets or rooms booked using points. Travel insurance is designed to reimburse prepaid and nonrefundable expenses that travelers incur before their trip departure. Since the traveler does not pay the cash value out of pocket for the reward points or air miles, they are not considered a reimbursable expense.
What can be covered?
Travelers can insure all taxes and fees that have paid and are associated with air miles or reward points. Some companies also provide coverage to rebank or redeposit the air miles. It is important to read the policy certificate or contact the insurance provider to confirm if they will provide coverage for rebanking fees.
What should I use as my deposit date?
Even though the value of reward points or miles can not be insured, if travelers use points or miles to make their first travel arrangement, this date will be considered the original booking or deposit date.