A New Kind of Travel Insurance

So crazy it just might work...

This a phrase I often associate with Warren Buffet and his dynamic and genius way of approaching business. So, it should be no surprise that Berkshire Hathaway Specialty Insurance, a subsidiary of Buffet's Berkshire Hathaway, has entered the travel insurance game with an offbeat approach.

When I purchase a flight or trip somewhere, I almost never check the box for travel insurance, except if it's an international flight or an extended trip where something could go wrong. Many other people also throw caution to the wind and choose not to buy it, mostly because some trips are low risk and low cost, so insurance doesn't really seem worth it.

Travel insurance is easy enough to buy and relatively cheap, but people are still a little hesitant to get it. Probably because they are confused by what it covers, how much it covers and when exactly it's necessary. But I think when people hear about this new plan from Berkshire Hathaway, they might just decide to check that box.

AirCare, the new plan from the Berkshire Hathaway Travel Protection unit, is basically a new form of trip protection. When people sign up for typical trip protection, they generally get covered for three things: cancellations (in the event you need to cancel the trip, your prepaid expenses are reimbursed), delays (if an airport is shut down due to weather, your prepaid hotel expenses are covered) and trip interruption (if you have to cut a trip short for any reason, your covered). The cost of each of these varies depending on the price of the trip or how much you want to cover.

But AirCare is a bit different.

Remember when your flight got delayed and you missed your connection? AirCare will give you $500.  Or the time you thought you were about to take off, but instead got stuck on the tarmac for three hours? Here's $1000 bucks in your pocket. I think you get the idea.

Coverage costs $25 per trip and every time any of those airline inconveniences occur, you get paid. Flight is delayed more than two hours? Here's $50 transferred automatically to your bank account to spend on food, drinks or whatever you need to get through the rest of your stay at the airport. Delayed or lost luggage? Just snap a picture of the airline-issued baggage claim tag, send it to BHTP, and they start processing the claim right away and transfer either $500 (delays) or $1000 (lost) into your account. *Bonus: The coverage can be purchased online up to an hour before your flight!

And guess what? These types of inconveniences are happening more and more. According to reports from FlightAware, about 90,000 flights have been canceled since December 2013, and about 30 million U.S. passengers are affected by delays or cancellations, costing even more money in lost productivity and additional expenses, according to masFlight.

The airline industry can be unreliable, we all know that, but when those inconveniences happen, it would be nice to know you have a check coming your way. I know it's something I might consider on my next trip, especially since the last two times I've flown, I've experienced a delay. Unfortunately, those delays weren't long enough to warrant any reimbursement. So I guess that's the risk you take. Spend $25 and possibly get some money if things go wrong, or spend $25 and have everything go right. And if the latter happens, at least you had some reassurance that not all would be lost if you happened to miss your connection.

Going to the Extreme

When it comes to travel, some are more daring than others. I recently came across two articles that both talk about extreme travel, but in two different respects.

The first one was based on a survey of workers who were asked if they would take a business trip to a dangerous location if their boss asked them to, or would they refuse and risk losing their job. Given the economy, it isn't too surprising that 23% said they would refuse the assignment, compared with 21% who said they would go on a perilous trip at least one time. About 14% said they would go to an unsafe place for work, but would look for a new job when they returned.

I guess my only question in this case is what classifies a place as unsafe? I would probably lump most of the places that have been popping up in the news in the dangerous category: Syria, Mexico, Egypt. Those destinations are all experiencing political turmoil and drug-related violence. But other than places like that, what really makes a location unsafe, at least on corporate standards? I should probably pose that question to the people who administered the survey or to a company that sells travel insurance, since they assess risks and liabilities for a living.



Boeing 737 Factory. Credit: Ben Mutzabaugh, USA Today



The second story is a bit more entertaining--and something I had never really heard of until today. It focuses on extreme fliers--people who love to fly, and I mean really love to fly. So much so that they chose to participate in a grueling week-long trek to five cities and two continents, all to experience a behind-the-scenes look at the airline industry.

One hundred and seventy travel fanatics paid from $799 to more than $4,000 to participate in the event, dubbed MegaDo, sponsored by American Airlines and its Oneworld alliance partners. They flew from New York to London, to Dallas/Fort Worth, to Seattle and then Los Angeles. While on the trip, they got the inside scoop on everything, from why flights are canceled to a ride down a plane's emergency exit chute. The events were created for the whimsical travelers, the most extreme fliers who love air travel. This is basically a hobby for them.

Some of the previous activities of MegaDo get-togethers included visits to the Airbuss factory in France, and the headquarters of Lufthansa. Some CEOs of major airlines have talked to the MegaDoes, answering questions and giving advice, as well as taking suggestions from some of their most loyal customers.



Smith Museum. Credti: Ben Mutzabaugh, USA Today



Most of us know at least one person who is an ultrafrequent flier, probably someone who has to travel a lot for work. But these guys are a totally different breed. Even those who travel a lot are irked by everything that comes with flying, such as security lines, crowded planes, delays, cancellations, etc. But these travelers just enjoy every part of it, especially the pay off after a flight: frequent-flier points. Many of the participants at MegaDo have hundreds of thousands of miles, with some saying theirs reach the millions.

MegaDo earned them even more. Attendees, in addition to VIP access, collected a minimum of 17,500 miles and about double that for anyone who bought first- or business-class seats. There was a special promotion for the event that offered the chance for up to 55,000 more points. The flights also earned them "elite-qualifying miles," which help them reach elite status.

Emergency evacuation. Credit: Michael Rubiano

While many people hang onto their miles until they need them--for instance, for a family trip abraod for two weeks--many of these extreme fliers travel for the sake of traveling, and to earn more miles. One such traveler took a flight to Sydney, Australia, only to spend six hours on the ground before heading back to his home in Winnipeg. Flying time was 24 hours each way, including connections. The reason: to top off his frequent-flier account.

As someone who travels as often as I can, but generally hates the whole process of it, I think these extreme travelers are a little crazy. When I hear that their travel passions are based on earning points and miles, I wonder about their validity. Is it all just about the numbers? Or is it about the experience? I love earning miles when I can, but it is not the main reason I travel. I go to enjoy a trip someone, to experience a new place, to learn about another culture or take some time to relax. My concerns were somewhat eased when I reached the end of the article. Two of the travelers made points that I can definitely agree with, and I think should be part of every traveler's philosohpy. The first said that it wasn't just about the flying, it was about the people you meet. I strongly believe that you can meet some of the most interesting people while traveling, and those individuals can turn into a great friend that you can reach out to if ever you are in their city, and vice versa.

The second traveler said "the more you get to see the world, the more you realize what else there is out there to see. Travel really brings the world together." If ever I become an extreme traveler, this is the kind of attitude I want to maintain, the kind of message I want to convey.