Have you used trip insurance to recoup cost of loyalty points?

[fredandkell]

Curious if anyone has ever filed a claim with trip insurance for the value of lost points, and if so, how does that work? We frequently book hotel rooms using Hilton or Marriott points, and now both of those chains require a 2-day advance cancellation. We are staying at a Hilton before our upcoming cruise, and it would be $134 if we had paid in cash vs. free on points. (A better example would be in February we are going skiing and it would be $775 if we had paid in cash, but we used 75,000 Marriott points).

So say either of these trips were canceled or delayed after the 2-day cancellation period. Although I wouldn't "lose" any money technically, it took me a long time to earn those 75K points and I would hate to lose them. Could I file with trip insurance for some kind of reimbursement on points, and if so, what cost basis do they use?

Thanks for any advice!

 

[fredandkell]

So I did find this clause in my trip insurance:
"If You used frequent traveler awards (frequent flyer miles or Hotel/Motel rewards) for any part of a Covered Trip, We will pay the fees incurred by You for re-depositing those awards in Your account if the Covered Trip is canceled for any of the reasons described above. This does not increase the total benefits payable under this Trip Cancellation benefit as stated in the Schedule of Benefits."

So Delta charges $150/ticket to redeposit miles, I guess that would cover it...still does not quite answer my question about hotel points.

The Marriott website says:
"Please note that we will assess a fee if you must cancel after this deadline.
If you have made a prepayment, we will retain all or part of your prepayment. If not, we will charge your credit card.
This fee equals 1 night of your room charge plus tax (for the first night of your reservation)."

So maybe they would just take away 25,000 points? I still wonder though, how the trip insurance company could reimburse me for the loss of 25K points? I wonder if they have some kind of chart somewhere that says "one Marriott point is worth XX dollars?"

 

[fredandkell]

Update - I spoke on the phone today to the travel insurance company (when calling about something else) and asked them this question. Apparently you would just be out of luck. Say for example you canceled your trip the day before you were supposed to stay at a Marriott, but Marriott required 2 days cancellation notice - you would just eat the points. Since Marriott doesn't redeposit points for a fee like Delta does, no cash exchanges hands and therefore the insurance company won't reimburse you because there is no "cash" to reimburse. Something to consider when traveling with points!!

 

[LYSE]

Thanks for the information!

 

[kiford]

Apparently you would just be out of luck.

That is correct. I don't know of any insurance that will cover lost points or the equivalent cost of them if you lose them; they only cover costs that might not be refundable or are extra (as previously mentioned such as a redeposit fee) and depending on the insurance maybe not even that. The rationale is that you didn't explicitly pay to acquire them - regardless of whether you chose to use their particular services/buy their goods in order to gain the points - they were a subsidiary benefit provided to you as a result of another purchase you made (and for which you obtained value) in order to encourage loyalty. Thus they have no value even if you can redeem them for something of value later. That's also why they can change the point redemption values, point disbursement amounts, put time limits on redemption, or require notice of cancellation or lose them. So they risk losing your loyalty due to their practices or changes but there was still no cost to you to explicitly acquire them, thus no cost to reimburse. (As an aside: on the corporate side, they do have value because they have to record them as a future liability so it's totally in their best interests to have you cancel well in advance or lose the points without compensation or charge you a fee to retain them. It's a dual edged sword - companies love to encourage loyalty today but hate compensating it later. That's why it's best to use them as soon as you reasonably can before they raise the requirements for redemption).

When we book flights on points, we have to pay the airport fees and taxes in cash. If we cancel and could not get a refund on that, we would be covered by insurance. However, those fees and taxes are refundable (at least they are on one of our plans), so they won't even insure those fees. Fortunately, we wouldn't lose the points either but if we did, too bad, so sad. It's a risk we have to consider every time we use points for anything.