Redeeming loyalty program points or miles for airfare offers a valuable way to reduce travel expenses. However, it’s crucial to understand the extent of coverage provided by travel insurance when these reward points are used. Typically, the monetary value of a flight booked using points represents an insurable interest. This means that if a covered reason for trip cancellation or interruption occurs, the policy may reimburse the equivalent cash value of the forfeited points or miles, allowing travelers to rebook their flights. Some policies might offer reimbursement for the original points or miles themselves, while others provide a cash equivalent. For example, if a flight booked with 50,000 points, valued at $500, is canceled due to a covered illness, the traveler could receive compensation up to $500.
Protecting the value of reward points through travel insurance offers significant financial security. Without this coverage, travelers risk losing the value of their accrued rewards if unforeseen circumstances disrupt their travel plans. This can represent a substantial loss, especially for long-haul flights or premium cabin tickets. Historically, the treatment of reward-booked flights under travel insurance has evolved alongside the increasing popularity of loyalty programs. As a result, more policies now explicitly address this aspect of travel, providing clarity and reassurance to those utilizing points and miles.
