Seriously, folks, it's only a couple hundred bucks....

We're not talking about losing life savings here. Even if the whole thing collapsed. Which I highly doubt.

Have gotten a headache reading several threads on this in the past hour. http://www.flyertalk.com/forum/smile.gif

I must say that I am confused at WHAT the heck 'Award Extender' really is? I assume this is not what one needs to cover a possible UA total flop, as miles do not "expire" as such? Cost for it is DOUBLE 'Award Guard', which at under $100 a person ($119 + $89) when Joh and I sign seems great value.

'Award Extender' is designed for our members who have miles expiring on one of the airlines we cover. After fulfilling a six-month vesting period at the 'Award Extender' level, we will extend your miles for an unlimited time as long as you keep your membership active and it does not lapse. Only miles that expire after the six month vesting period has been completed will be extended.'

Reading it all I agree with another poster on a previous thread the word "insurance" is not used anywhere. I assume (and it only that) this means that the program does not then need to be registered in 50 whatever states and 30 foreign countries and covered by all kinds of mountains of regulatory paperwork - all of which would probably treble or quadruple the cost at no extra $$ cover for us. It is more "Assurance" than "Insurance" as that poster said.

We are simply buying peace of mind here, for a pittance IMO, and trusting Randy that claims - if any occur - will be met as promised. We are happy to take it on that trust basis.

And lets be honest here folks ... the alternative policy/cover to cover these miles is WHAT??? http://www.flyertalk.com/forum/smile.gif

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 coverage 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.

Yes, I would be thrilled with that change. Since it currently says:
This $7,500 is a fixed-limit liability and cannot be exceeded, regardless of the number of years that an AwardGuard account is maintained or the number of programs that go out of business in a given membership year. The coverage will expire when you have used up all your miles and/or points, or we have spent $7,500 in replacement value, whichever comes first. You must keep your membership active in order to make claims against your banked miles and/or points.

it would also be a change in the program rules.


Anyway, his word alone is good enough for myself and Joh, and we have just signed up.
[/QUOTE]

As I've said before, that's a choice you are free to make. Me, I'll take the legally binding terms of the program, as posted and as agreed to when registered, over bits on an internet site.


Bottom Line - The program web site and legal terms of the program say $7,500 aggregate, one-time, fixed lifetime total for all progams that go out of business in a year, and you must maintain your membership every year to use that aggregate total. Randy has posted that you can get $7,500 per year.

If we can all agree that those are the facts, can we stop beating it to death and leave it to individual interpretations/risk profiles/trust? Hmmm?

Since $7,500 may buy you only ONE business class ticket to EUrope it is obviously best not to use this product to cover massive mileage balances.

I have been subscribing for over 10 years as I was worried about the viability of my TWA miles. I'll still pay, but this does lesten the value of the product. On a positive note it does limit the exposure of the program to huge claims which means it may be there when you need it (even if a airline size of UA goes under).

The Colorado Revised Statutes, found here:

http://198.187.128.12/colorado/lpext...102JD_10-1-102

defines "insurance" as "a contract whereby one, for consideration, undertakes to indemnify another or to pay a specified or ascertainable amount or benefit upon determinable risk contingencies, and includes annuities."

As defined by the legislature of Colorado, "Award Guard/Privilege Flyer" as described in the Statutes, is selling insurance. Are they licensed to do so? Have they met the regulatory and reserve requirments that would allow them to do so?

Is Award Guard/Privilege Flyer/Randy Petersen registered and licensed to sell insurance in Colorado, it's residence? Do they have reserves which are verified by governmental authorities which allow them to make the guarantees they do on their website?

If "Award Guard/Privilege Flyer" is not licensed as an insurance company, it may be a significant problem. Since according to the Statutes the product they are selling is insurance, a claim that what they are selling is something other than "insurance," he/she in my opinion may be violating various provisions of the Colorado Consumer Protection Act, found here:

http://198.187.128 .12/colorado/lpext.dll/Infobase/3470/3472/3474?f=templates&fn=document-frame.htm&q=consumer%20protection%20act&x=Advanced &2.0#LPHit1LPHit1

Caveat emptor.



[This message has been edited by iwass (edited 03-23-2003).]

I figure we should all join Awardguard and regard the $ as our Flyertalk dues. If it pays off, so much the better.

I imagine that Randy, as an apparently shrewd businessman, has either an opinion in hand from the Colorado Insurance Commissioner that his product(s) is(are) not insurance, or an approval to sell such products as insurance.

It would, however, be interesting to know which.

PS. I just took at look at the AwardGuard registration form. If anyone here thinks that for about a hundred bucks a year this outfit is going to pay you the equivalent of $7,500 per year in free travel if your program goes out of business while charging you the same premium whether you have 25,000 or 2,500,000 miles in the bank, you're high.

[This message has been edited by Mikey likes it (edited 03-23-2003).]

That thought very much crossed my mind. http://www.flyertalk.com/forum/smile.gif

Perhaps Randy's folks might consider taking a leaf from the eBay book: We are giving you in a white 'cyber-envelope' a valuable FF board access code privilege for $119 - and WITH it comes totally gratis - AwardGuard cover. http://www.flyertalk.com/forum/smile.gif

Bet there are no bureaucratic regulations attached to that. http://www.flyertalk.com/forum/wink.gif

Due SOLELY to Flyertalk I learnt in the last few days of the cessation of the United>Hilton transfer ending forever in a few hours time. I now have 440,000 miles safely there that I would otherwise not have. That rapid heads-up is worth a lot more than a hundred bucks to me - right there.

------------------
~ Glen ~

Come visit HERE the most ** FRIENDLY FORUM ** on FlyerTalk. No flame wars, no personal abuse, no substance abuse. Not much of anything really!

[This message has been edited by ozstamps (edited 03-23-2003).]

http://travel.boston.com/columns/sen...hare_scam.html

Interesting fragment of a Boston Globe article, pertinent to the present thread:

Mileage insurance?

On June 2 , Sensible Traveler focused on some options for protecting air miles during a period of airline instability, and suggested insurance from PrivilegeFlyer.com as a possible answer.

Andy Dhuey of Berkeley, Calif., contacted me shortly after that column appeared, raising questions about whether the Award Guard coverage was legitimate insurance and whether it would truly offer any protection if a big airline went under. He said he had been unable to get any information from the company.

I followed up with Privilegeflyer.com and was told Award Guard is not insurance. A representative said the company does not pay out cash claims, but allows its clients to use their "lost" frequent flier miles on other airlines. While Privilegeflyer has protected customers in past airline failures, the company's representative declined to discuss whether it could weather the failure of a big airline.

"Privilegeflyer is a privately held company with private backers who do not wish to be identified," the representative said. "If you wish to know more about the stability of our company, like so many other customers these days, I can tell you that this is our 13th year in business and we are not planning on going anywhere."

Of course, a lot of people feel that if it walks like a duck, looks like a duck, and quacks like a duck, it must be a duck!

Here's a fragment of an article which calls Award Guard/Privilege Flyer by the name "insurance"...........

http://www.benefitscanada.com/Conten...99/ben186.html

High flying

With all the turbulence in the Canadian airline industry, you might want to consider taking out insurance for your frequent flyer points.

Privilege Flyer is a U.S.-based company that specializes in insurance for members of frequent flyer plans, including Canadians. The insurance, called AwardGuard, is designed to protect unused miles, points or rewards in the event that an airline goes out of business.

If an airline goes out of business and its frequent flyer program isn't taken over by another plan, Privilege Flyer can purchase up to $15,000 worth of replacement tickets. The insurance costs US$119 for one year or $214 for two years. Take a trip to the Web site at www.privilegeflyer.com.

ABC News also seems to think the Award Guard/Privilege Flyer product is "insurance*" too:

http://i.abcnews.com/sections/busine...il_020606.html

* Insurance is defined as "a contract whereby one, for consideration, undertakes to indemnify another or to pay a specified or ascertainable amount or benefit upon determinable risk contingencies, and includes annuities." - Colorado Revised Statutes

AwardGuard could change the terms (example exclude UA Mileage Plus from being covered) with 60 days notice ...

Rudi - I am actually surprised that the wording of the policy does not, as a matter of course exclude taking new members who are able to get cover for an airline already in Chapter 11 WHEN the policy is initiated.

i.e. AA is covered NOW, but if they go into Chapter 11, NEW members would have AA excluded, but existing members are still covered for AA etc.

If a disproportionate slab of those covered are mostly covered for US Air, UA ...... then AA, CO or whomever is inevitably next, the liability skew is obvious. http://www.flyertalk.com/forum/smile.gif

------------------
~ Glen ~

Come visit HERE the most ** FRIENDLY FORUM ** on FlyerTalk. No flame wars, no personal abuse, no substance abuse. Not much of anything really!

What will happen if Award guard cannot handle all claims from UA chapter 7 and deccides to follow the same route ?

iwass, I noted that the above posts are nearly identical (and in some cases completely identical) to your posts here.

So just a reminder to the whole community -- duplicate posts are not appropriate on Flyertalk. Separately, let's keep the tone of the conversation civil. Let's not ask the same questions over and over and expect to get answers. Instead, perhaps anyone interested in the particulars of the AwardGuard program might call its customer service number.

Thanks,
Gary
aka gleff
MilesBuzz and Delta moderator

I have a related question, how do they handle upgrade awards? If I want to use my defunct miles to upgrade an economy ticket from the U.S. to Europe, do they pay the difference between a coach and a business class ticket on any airline? Also, do we become exempt from capacity controls? If so, a chapter 7 might be a blessing in disguise.

From http://www.awardguard.com/claiminfo.htm

I was all set to plunk down my $119, but I find it very disturbing that there is no publicly available information on the financial condition of awardguard or its "reinsurers." When you buy regular "insurance" you are provided with information on the financial health of the company. Therefore, I do not think it unreasonable to ask Randy to provide the following information:

(1) Number of awardguard members.

(2) Assets.

(3) Liabilities (exposure) if United and/or USAir liquidate.

(4) "Reinsurance" or how they intend to pay "claims" if United goes kaput.

Do we know if anyone who had miles on National, Ansett or Canadair has experienced difficulties in booking flights through awardguard? Even if the answer if no, it would not be a shock as the smaller program that folded (particularly domestic airlines) presumably had fewer members and less expensive routes to cover.

Has anyone called the Colorado Dept. of Insurance to determine if they have made any inquiries?

$119 is not a huge sum, but one does not want to throw good money after bad.

All good questions, if you were buying insurance and I ask similar questions when i recently changed insurance companies on my house. The big differecne is that PrivilegeFlyer has stated for over 12 years that it's not in the business of insuring your miles. It's in the business of helping members get more out of their frequent flyer programs.

As for your other questions, you might re-read the information available on the Web site - it appears that neither Ansett, National or Canadair were ever included in their AwardGuard benefit, so it seems a bit unusual to inquire of that issue. In 12 years you'd certainly expect that anyone having any problem - even the smallest would have complained and there would be a record with the local BBB or elsewhere. There doesn't seem to be any record of any complaint in 12 years - amazing record of member satisfaction. And while there have been just a small number of frequent flyer programs that might have been covered in their protection, it does seem they covered expiring miles for American and United for ten years (all before FlyerTalk and the popularity of the Internet. Since those were huge programs and every member had expiring miles, there must have been thousands of people who protected their expiring miles while using their other program benefits. Seems that all those members must have been happy with their benefit claims since again there are no record of a single complaint. As for exposure? As I think they (PrivilegeFlyer) are the insured with what is known as Contractual Liability Insurance, and their rulles seem to indicate that their first knowledge of any liability would only come at the time a program goes down - they really would not have a way fo knowing exposure other than to carefully choose who they purchase insurance from. But that's their option and choice.

In the meanwhile, you sure seeme to get a lot of stuff from them that ultimately seems to help you earn more miles and points. I hear that the roots of PrivilegeFlyer are from their Frequent Flyer Club that they started back in 1987. For most people on FlyerTalk - it's hard to believe that these guys were "into" helping people with their miles that long ago.

I have no clue what program CG normally uses as it is not stated, but many of us are in different situations to others. Joh and I for instance, like all United 1Ks each get 6 x SWU upgrade certs valid for a year on LH flights.

So, even if UA did go belly up this afternoon, and the AwardGuard was activated, there seems nothing to preclude buying 5 or 6 or more round trip coach tickets from USA-Europe or V/V on Lufthansa, thus readily staying within the $7,500 per person cap, and standing by for ugpgrade on flight day.

As 1K SWU's are fully transferable, I suspect we would never be short SWU in that event for the next year. http://www.flyertalk.com/forum/smile.gif

No idea how AwardGuard allows one to "spend" the $7500, i.e. it if allows one a specific airline choice. If I wanted to use the $7500 for ten (or less) x $750 LH round trips USA-Europe for example, and nominated LH as the sole carrier only, I assume that is OK? Even if another carrier may be lower priced, one imagines it is the flyer's choice within reason as it is 'your' money being spent??

As one does not have to be a 1K to use a SWU, I imagine ANYONE who needed them in the case of a UA demise could readily source them via Coupon Connection. There would be a lottttttttt spare in that case. http://www.flyertalk.com/forum/wink.gif

Don't know the details of this, and have never spoken with Randy about it, but I imagine this is analogous to a basketball team which runs a promotion: if a fan sinks a basket from center court, the fan wins $1mm.

Teams that offer that regularly take out insurance so that if the fan sinks the basket, the insurance pays. They pay the same premium either way. They can even root for the fan to come out on top, because nothing's coming out of their pocket either way...

That's how it sounds to me based on the description, but again I haven't looked into this.

While I respect the judgment of most of the rest of my fellow travel savvy FTers, and certainly the expertise of the man himself, Randy Peterson, my own good judgment counsels against purchasing AwardGuard at this juncture. There are just too many questions about the terms of the program, its benefits, and the company's solvency in the event of a deluge of claims to justify potentially thowing $119.00 down the drain.

Unlike the insurance industry which is heavily regulated, the same cannot be said for the "assurance" industry, whatever it is. From what I know, AwardGuard is relatively untested when it comes to major airline liquidations. For that reason, any absence of notable black marks with the Beter Business Bureau must be taken with a grain of salt. Other than a purported clean bill of health from the BBB, purchasing AwardGuard coverage appears to be a $119.00 blind leap of faith.

For me, even with the anxiety associated with the possible, even probable, loss of significant reward travel value, AwardGuard is just too risky an investment with the information presented (and withheld). The only thing worse than losing a bundle of Mileage Plus miles, would be losing $119.00 as well. The assurance is tempting, but does the emperor have any clothes?

[This message has been edited by cAAl (edited 03-24-2003).]