I don't if I'd use the word useless. This actually makes sense as everyone pays the same amount per year. Covering my 2M miles and Joe Schmoe's 400K miles for the same annual fee doesn't quite seem fair, does it.

I would prefer to see a miles-based premium, just like insurance policies based on payout amount. Get coverage for all your miles, but your annual fee is based on the total benefit/miles protected.

The real problem is that there is no 'premium' program for the outlyers among us.

Originally posted by Randy Petersen:
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"QUESTION: Is there a cap to either the number of accounts or number of miles?
ANSWER: No cap on the number of programs covered per membership to the extent of those listed in our materials (it doesn't matter if you belong to 2 or 12 programs) and we don't have an actual cap to the number of miles we can protect for you (some members have millions and with the Midway program, while their award structure was not mileage-based, some members did have covereage equal to about 900,000 miles, which why some 10 years later they are still enjoying their awards courtesy of AwardGuard). The restriction is based on payout per year. For instance, new members can't have claims equal to more than $7.500 in a given year PER program. The reality is that most people may redeem 2-4 rewards a year and most don't exceed that cost. The cost being the claim to supply substitution of awards via a purchased airline ticket."

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Even though Awardguard should be free to change the terms of their program for future members/renewals, the original terms described by Randy Peterson above should be honored for all current members until their term expires. This is not the first time the terms have changed (originally there was no limit at all), but this attempt to retroactively reinterpret the terms is wrong and unethical.

It looks like Randy is honoring the original terms without any limits for the original Midway FF members, and the same principal should apply here.

[This message has been edited by ananthar (edited 11-11-2002).]

Sorry to bring this up again, but would someone please just tell me which it is:

1) $7500 per program per year (meaning if airline x goes under, then you get a new $7500 each year to use on airline x)

2) $7500 per program, period (meaning if airline x goes under, then you get $7500 to spend and no more than that, whether you spend it in one year or spread over several years)

Thanks.

I take all the above to mean (2) with the proviso that only one of the programs you "insure" went bust in each year. If two went bust in the same year that $7,500 lifetime amount covers both programs.

This might deserve another thread but...How is Awardguard underwritten?

The amateurish membership letter that came along with enrollment last year and lack of information on the website don't exacty inspire me to renew.

Here's a thought:

The absolute worst outcome is if UAL gets broken up somehow, and another airline would like to acquire their FF accounts, but not at the full value (of X trillion miles).

The acquiring airline takes the FF accts, but then offers a 5-to-1 or a 10-to-1 conversion into their existing program. AwardGuard buyers lose both their money and almost all of their miles.

Even valued at a penny or less apiece, this liability is MASSIVE. For an airline like American or Northwest, obtaining "FFlyer loyalty" at the potential cost of billions of dollars is a sucker's bet. If the flying public decided to cash out at the pre-conversion rates, even at standard awards, the planes would be flying full of freeloaders.

Randy's indicated on FT before that AwardGuard is reinsured through major insurers. He also indicated that there were some indications that reinsurance might not be available in the near future, meaning they could not offer AwardGuard to new customers in the future (but that existing customers would be covered), so if you're interested in it, sooner is better than later, especially considering the latest news (which I'm sure is what prompted this to get bumped back up again!).

The fatal flaw of your theory is that you forget that award seats are capacity controlled, so there's not much chance that an airline taking over the miles would have planes full of freeloaders unless they wanted it that way ...

I'll chime in here. I'll stand by what I say. As some of you, even a single word change can dictate a different answer to anyone from a question. If I make a mistake in taking care of our members, i'm the one losing out. As it is now I haven't lost out because we've always been properly reimbursed in claims. The idea being we try very hard to take care of our members - which is why I'll fully put our pst on the factual plate for you to consider (not the wisecracks from those with no experience). AwardGuard, etc. is almost 12 years old - longer than some of your have been accumulating miles. In all those years you'll not find a single compaint to the BBB or anyone else that they were not taken care of properly in any claim situation. Now how can that be unless I've got a 100% happy group of customers. sure. there's only been Midway claims on the AwardGuard side, but you are missing the many members whose expiring miles we protected in the mid-90s for programs like American and United. Far more people were worried and effected by expiring miles then than are worried about United's bankruptcy now. Can you find a single complaint?

If i've made a mistake and you correctly come to me with your interpretation of what i say if two airlines go out of business in the same membership year you might have - then what so you think will happen? I'd like to think that our past is a pretty good indicator of the future. Your choice.

As for the amateurish letter, etc. You're right. We did not go out and spend a sh*& http://www.flyertalk.com/forum/thumbsup.giftload of money on fancy things to make you feel good about AwardGuard. Instead we concentrated on maing this an affordable service for people to get more out of their frequent flyer programs. If this were really a business for us, my guess is that your annual membership fee would be about $347 a year. You decide scootcha if you want to renew. just let me know if you want a real expensive welcome letter for renewal or if you are grateful there is even an option.

As for the other comments about other airlines acquiring the FF accounts from United at a discount. My following comments come from experience and from actual facts. Since the advent of frequent flyer programs - there has never beeen a single case where when an airlines completely goes out of business - other airlines honor those miles. I don't believe you can name a single example. For any of those other "experts" that continue to say other airlines will honor MP's miles, apparently you do not know the history of these programs. Only in cases where another airline actually purchased the other airline were miles and awards given a future. I'm not trying to scare you since I continue to say I personally don't think you need AwardGuard (go ahead, look over my comments on WebFlyers' 'notiflyer) but the "facts" are the facts. Mileage Plus has near one trillion miles of liability. They are the second largest program in the world with some 44 million members. They will give away some 2.3 million free tickets this year. Who in these times could even come close to thinking about free awards? Heck...the reality is that airline know they don't have to honor any free tickets from an airline going out of business (official policies). Why? Well, if United is out of business, every airline will benefit from new passengers without paying for frequent flyer awards. Why would you want to pay for liability when you are going to get the passengers (or at least fair market share) anyway. One of these other "experts" suggested that Delta would honor them if United failed. Excuse me. Why would Delta expend that expense after they got burned in the Pan Am deal? also, with Delta and their current alliance with United - heck, they already really know which of their passengers have a propensity for Mileage Plus miles since they have to tag them anyway when United members fly Delta. Delta could simply go into that base and offer up bonuses to those members without honoring liability or anything else. Honestly, would you blame Delta if they did not honor your United miles? The answer is simple then - you picked the wrong program. As i've said, my millions with United will be good for me tomorrow and the next day and I truly beleive the same for your United miles. I'm only in business by being right on things like this - so I'm not really blowing smoke.

Now, whose got the next question?

But most programs allow you claim an award free of capacity controls at twice the mileage level. Although most people are reluctant to do this, they may be much more willing to do so if miles that otherwise would have become useless get moved into another carrier's program that they have no intention of using on a regular basis.

C'mon, Beckles, I expected a better answer from you than that.

I just checked a few flights leaving Tampa and going to Maui for this weekend. The standard award for 60,000 miles gets me a seat on the plane and back.

Forget the saver awards - people are going to start cashing in the miles big time.

I see a contradiction here. You say that 1. No one will honor United's miles if they go belly-up, and 2. You feel safe with your United miles.

On a related note, I find this whole situation really exciting. I believe that we are going to see more changes in FF programs in the next 6 months than we have seen in the past 10 years.

This board is going to light up as everyone evaluates the major changes - you're going to be a very busy man, Randy!

I've got a few predictions for 2003, if someone wants to start up a new thread. My 2002 predictions did okay - US and UA going bankrupt.

So am I, and I'm still short United.

It was not the look that I was intending to comment on. It is the lack of information about the program in the letter and on the website that concerned me. I don't care if it's in crayon as long as it is adequate. I still have the orignal question as to what/how companies underwrite/reinsure the liabilty of this program.

i.e. would I recognize their name?

I think the lack of an answer IS your answer - there's no underwriter as with a regulated insurance company. Similar discussion here:

http://www.flyertalk.com/forum/Forum1/HTML/005223.html

Actually there is no contradiction. He's saying that if UAL should go away completely, that there is no good reason for DL to assume the MP liabilities. However, he's also saying that he doesn't think that UAL will completely go away.

But I do have a question for Randy - if UAL does go away, which award chart will be used for awardguard claims - saver or standard?