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.

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.

Bet there are no bureaucratic regulations attached to that.

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.

------------------
~ 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.

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.