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Frequent flyer points & travel insurance

What’s up Jetsetters! Been high in the sky so much that you’ve earnt yourself a heap of frequent flyer points?

What happens if you pay for your flights using points and then you need to cancel your trip? Technically
you’re not out of pocket, so can you claim on your travel insurance?

Whether you're tallking Velocity, One World, Qantas, Kris flyer or Emirate skywards, lucky for you a few Australian insurers have flapped their wings and said yes to covering your well earned points. They will pay the value of your reward points used to purchase an airline ticket, if you need to cancel due to unforeseen circumstances outside of your control.  

when will travel insurance cover trip cancelation with points?

If you are unable to collect compensation from your airline, the following events would allow you to seek reimbursement from your travel insurance:

Trip cancellation due to:

  • Severe illness: If a medical practitioner notifies that you are unfit to go on your trip
  • Accident: Unexpected events such as a car accident on your way to the airport that stop you from travelling
  • Family emergency: If you need to return home or cancel a trip because a family member is unwell or there has been a death to a close family member
  • Natural disasters: Storms, hurricanes, earthquakes and all other severe weather conditions that affect your pre-paid travel arrangements
  • Extreme events: Hijacking, riots and civil unrest that could alter pre-paid travel

When are you not covered?

Circumstances where you would not be liable for reimbursement include:
 
  • Cancelled flights: Flights cancelled due to mechanical faults, overbooking, maintenance, repairs, rescheduling, service faults or the insolvency are not covered. It is the airline’s responsibility to compensate, reimburse, or find an alternative flight for the traveller – not the insurer
  • Missed flights: If you turn up to check-in 30 minutes late and miss your flight your points won’t be redeeemable. Any delays because of your own negligence are not covered under travel insurance
  • Change of mind: If you cancel your trip just because you decided not to go, travel insurance will not cover the cost
  • Double reimbursement: If you are already due compensation from another source, travel insurance will not recover the lost points as well
     

Which insurers cover frequent flyer points?

Insurer

Do they offer it?

Underwriter

1Cover Certain underwriters at LLoyd's
1st for Women Auto and General
Amercan Express Chubb Insurance Australia Limited
Boomers Allianz Australia Insurance Limited
Budget Direct Auto and General
Citibank Chubb Insurance Australia Limited
Columbus Direct Certain underwriters at LLoyd's
Cover-more Great Lakes
Downunder Certain underwriters at LLoyd's
Fastcover Hollard
Insure & Go Mitsui Somotomo
Itrek Certain underwriters at LLoyd's
Kango Cover Certain underwriters at LLoyd's
Multi-Trip Mitsui Somotomo
No Worries Certain underwriters at LLoyd's
Priceline Protects Chubb Insurance Australia Limited
Simply Travel Insurance Certain underwriters at LLoyd's
Ski insurance Certain underwriters at LLoyd's
Southern Cross Southern Cross Benefits Limited
STA Travel Allianz Australia Insurance Limited
Tick travel Mitsui Somotomo
Travel Insurance Saver QBE Insurance Limited
Traveller Chubb Insurance Australia Limited
Under 30 Certain underwriters at LLoyd's
Virgin Money Allianz Australia Insurance Limited
Webjet Allianz Australia Insurance Limited
Zoom Travel Insurance Certain underwriters at LLoyd's
 

how much will my travel insurance cover?

The terms around how much you’ll be reimbursed will vary from insurer to insurer. Typically you’ll receive the cost of an equivalent class airline ticket, based on the price at the time the original was purchased, less your financial contribution toward the airline ticket.

It is calculated by multiplying the total number of points lost, divided by the total number of points that were used to purchase the ticket.
 

Do airlines reimburse unused points if flights are cancelled?

Each airline will have different rules around their loyalty programs so your first point of call should be to always check with them first. Before you book your ticket, check your airline’s policy surrounding cancelling flights that have been purchased using rewards points.

You may not be liable for points reimbursation if:

  • The flight was purchased on sale
  • You are a low-level points collector
  • You receive points through retail partners, not directly from the airline
  • You have not opted to pay a refund fee at time of flight purchase
     

check the small print

Don't just take our word for it! It’s vital that you check your chosen insurers Product Disclosure Statement in regards to cover for flights booked with frequent flyer points before purchasing your policy. Whilst it's amazing to be able to travel in a world using rewards, you may not always get the flexibility and protection needed for your overseas trip. 

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