Just got off the phone with a friendly CSR at PrivelegeFlyer. No hold time, phone was answered by a person. And it's great to have the company president here too.
Here are the caveat-emptor questions I asked and the answers I got.
I asked exactly when coverage would begin for a new subscriber, the answer was 12:01am the night of your signing up.
I asked what the rationale was for charging a flat annual fee per person irrespective of the number of miles being insured (i.e. someone with 100,000 miles in jeopardy pays the same annual premium as one with 5 million): the answer was that it would be too difficult to keep track of everyone's mileage accounts, which of course fluctuate.
I asked how "family" is defined for the purposes of the discounted annual fee; the answer was any person whose frequent flier statements come to the same address as the primary policyholder.
She wanted to make it clear to me that the AwardGuard program's payout happens only when an airline goes completely out of business (Chapter 11 doesn't count). This is consistent with what is stated on the website. I asked what would happen if an airline were to suspend its frequent flyer program, but not go bankrupt. The answer was that coverage would not apply to this situation.
Despite only having 250K+ miles in the bank, I am leaning towards signing up. However, there are a couple of things that bother me a bit.
First, when one buys life insurance, car insurance, homeowners' insurance, etc., the premium paid is proportional to the maximum possible benefit. This is simple fairness. Following the example of term life insurance policies, would it not be more equitable to charge a premium of $x
per 100,000 miles per year? In other words, someone with 2 million in the bank could feel free to take out a policy that only protects 100,000 miles, 1 million miles, or all 2 million, and pay a correspondingly scaled premium.
It would be easy to structure the rules to prevent someone from taking out more coverage the years after their program went broke.
The fee structure as it stands now appears to subsidize the accounts of the super-mile-rich at the expense of those of us with more meager balances. On FlyerTalk this is probably a welcome feature
but I'm going to complain for the little guy here. And if I am missing something here I'd be glad to know. Clearly the program as it stands now makes for simpler billing and my guess is that this wins out over idealistic egalitarianism.
Second, and this one is much more far-fetched, but say for the sake of argument that one or more of the major US airlines go out of business (heaven forbid). What would stop them from declaring the FF program null and void the day before liquidating? Doing so would seem to make no difference from the airline's point of view; however, whatever insurance company is underwriting AwardGuard would have a presumably significant financial incentive to persuade the airline in question to do just this. Yes, it would be a dirty trick indeed to use this loophole in this manner. Hopefully unlawful too. And probably very unlikely. Even if this scenario were to never occur, the "discontinued FF program" loophole does make the decision of whether to spring for it a little tougher for me.
Despite these minor gripes, the concept behind this is very innovative, the company seems to be well staffed and well regarded by those who have benefitted from it, and I am very glad that it exists right now.
[This message has been edited by V21 (edited 09-17-2001).]
[This message has been edited by V21 (edited 09-17-2001).]