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Travel insurance that covers frequent flyer points

Don't lose your frequent flyer points. Travel insurance can protect them when the unexpected happens.

Updated

Fact checked

Many of us have used frequent flyer points to book travel, whether it be for flight upgrades, accommodation or even car hire. So it makes sense that you might want to protect your purchases since these points can be valued quite highly.

Luckily, some Australian insurers will reimburse your frequent flyer points, but only if you need to cancel due to circumstances outside of your control. Most will pay the value of your reward points used to purchase an airline ticket.

Will travel insurance cover trip cancellation with points?

It depends. If you cannot collect compensation from your airline, you are generally able to seek reimbursement from your travel insurance for the following reasons:

  • Family emergency. If you need to cancel a trip because a close family member is unwell or has died.
  • Severe illness. If a doctor provides written evidence that you are unfit to travel.
  • Accident. Unexpected events that prevent you from travelling, like a car accident or injury.
  • Extreme events. Civil unrest, war and other extreme events that could alter pre-paid travel.
  • Natural disasters. Storms, earthquakes, tsunamis and other severe weather conditions that affect your pre-paid travel arrangements.

When does travel insurance not cover your frequent flyer points?

Generally speaking, you won't be covered if you cancel your trip without justification. Some of the reasons where you would not be reimbursed include:

  • Changing your mind. You're never able to just cancel your trip because you decided not to go and receive a full refund.
  • Missed flights. If you miss your flight, you won't be eligible for a refund on the points you used to book your trip, unless you missed your flight for reasons outside of your control.
  • If your airline, accommodation or tour operator goes bust. Unfortunately, even if you've purchased travel insurance, you won't necessarily be covered. Most policies specifically exclude cover in the event that a business becomes insolvent. There are only a few Australian brands that will cover you if a travel carrier or airline goes broke.
  • If you can get reimbursed elsewhere. If your airline or tour operator agrees to pay you compensation, travel insurance will not recover the lost points as well.

Who covers trip cancellation with points?

Below is a table of the travel insurance providers that could pay out the value of your points if you have to cancel your trip. The information is accurate as of April 2020.

BrandPDS wording and frequent flyer mentions
1Cover Logo"We will pay the value of any frequent flyer or similar air travel points, loyalty cards points, redeemable vouchers or other similar schemes, you used to purchase an airline ticket following cancellation of that airline ticket due to unforeseen circumstances outside of your control, if you cannot recover the lost points from any other source."
ahm logo"You have to cancel the Journey (where You cannot rearrange it prior to leaving Home) We will pay Youthe value of frequent fyer or similar fight reward points, air miles, redeemable vouchers or similar schemes lost by You following cancellation of the services paid for with those points, if You cannot recover Your loss in any other way."
All clear travel insurance logo"Where an airline ticket was purchased using frequent flyer or similar air points, we will pay you the frequent flyer or similar air points lost following cancellation of your air ticket."
American Express logo"We will calculate the cost of an equivalent class airline ticket based on the quoted retail price at the time the ticket was issued deducting Your financial contribution toward the airline ticket multiplying the amount by the residual total number of points lost divided by the total number of points used to obtain the ticket."
Australia post logo"For frequent flyer or similar flight reward points lost following cancellation of Your airline ticket. The amount We will pay is the cost of the equivalent class airline ticket, based on the best available advance purchase airfare at the time the claim is processed, less Your financial contribution towards the airline ticket multiplied by the total amount of points lost divided by the total amount of points used to obtain the airline ticket."
Boomers travel insurance logo"For the value of frequent flyer points, air miles, loyalty card points, redeemable vouchers or other similar schemes lost by you as a result of cancelling the services paid for with those points, air miles, vouchers or schemes, but only if you cannot recover your loss in any other way."
Budget Direct Logo"Where an airline ticket was purchased using frequent flyer or similar air points, we will pay you the frequent flyer or similar air points lost following cancellation of your air ticket."
Covermore logo"The value of frequent flyer or similar flight reward points, air miles, redeemable vouchers or similar schemes lost by You following cancellation of the services paid for with those points, if You cannot recover Your loss in any other way."
Fast Cover Logo"Your loss of frequent flyer or similar air travel points you used to purchase an airline ticket following the cancellation of that airline ticket, if you cannot recover the lost points from any other source."
ING direct logo"Where an airline ticket was purchased using frequent flyer or similar air points, we will pay you the frequent flyer or similar air points lost following cancellation of your air ticket."
Picture not described"Where an airline ticket was purchased using frequent flyer or similar air points, we will pay you the frequent flyer or similar air points lost following cancellation of your air ticket."
Insure4less logo"Frequent flyer or similar flight reward programmes – claims for points lost due to the cancellation of your airline ticket will be reimbursed based on the nominated cash value for those points given by the reward programme operator."
itrek logo"We will pay the value of any frequent flyer or similar air travel points, loyalty cards points, redeemable vouchers or other similar schemes, you used to purchase an airline ticket following cancellation of that airline ticket due to unforeseen circumstances outside of your control, if you cannot recover the lost points from any other source."
Medibank logo"The value of frequent flyer or similar flight reward points, air miles, redeemable vouchers or similar schemes lost by You following cancellation of the services paid for with those points, if You cannot recover Your loss in any other way."
Online travel insurance logo"For the value of frequent flyer points, air miles, loyalty card points, redeemable vouchers or other similar schemes lost by you as a result of cancelling the services paid for with those points, air miles, vouchers or schemes, but only if you cannot recover your loss in any other way."
Qantas logo"Loss of Qantas Points, we will refund unlimited Qantas Points for any Qantas Frequent Flyer award ticketing or rebooking fees that you may incur for any reason covered by this insurance."
RACV logo"Where an airline ticket was purchased using frequent flyer or similar air points, We will pay You for frequent flyer or similar air points lost following cancellation of Your air ticket."
Simple travel insurance logo"We will pay the value of any frequent flyer or similar air travel points, loyalty cards points, redeemable vouchers or other similar schemes, you used to purchase an airline ticket following cancellation of that airline ticket due to unforeseen circumstances outside of your control, if you cannot recover the lost points from any other source."
Skiinsurance.com.au travel insurance logo"We will pay the value of any frequent flyer or similar air travel points, loyalty cards points, redeemable vouchers or other similar schemes, you used to purchase an airline ticket following cancellation of that airline ticket due to unforeseen circumstances outside of your control, if you cannot recover the lost points from any other source."
SCTI logo"Up to the lower amount of the 'Cancelling or changing your journey' cover amount as confirmed on your Certificate of Insurance; or the equivalent amount if your frequent flyer points were redeemed as a dollar value; or the equivalent amount as advised by the transport provider if your frequent flyer points were redeemed without a dollar value; or the amount charged for the frequent flyer points company to reinstate the frequent flyer points up to a maximum of $5,000 per journey."
Tick-Travel Insurance Logo"Where an airline ticket was purchased using frequent flyer or similar air points, we will pay you the frequent flyer or similar air points lost following cancellation of your air ticket."
Tilda logo"If you have to cancel any pre-paid travel expenses we will pay you the loss of frequent flyer points you used to purchase an airline ticket if the airline ticket is cancelled and you cannot recover the lost points from any other source."
Travel Insurance Direct logo"We will pay you for loss of frequent flyer or similar air travel points you used to purchase an airline ticket following cancellation of your airline ticket and you cannot recover the lost points from any other source. The cancellation must be due to unforeseen or unforeseeable circumstances outside of your control."
Travel insurance saver logo"The cost of the equivalent class airline ticket, based on the best available advance purchase airfare for the same season of the following year, less your financial contribution towards the airline ticket multiplied by the total amount of points lost divided by the total amount of points redeemed to obtain the airline ticket."
Travel insuranz logo"Frequent flyer or similar flight reward programmes – claims for points lost due to the cancellation of your airline ticket will be reimbursed based on the nominated cash value for those points given by the reward programme operator. We will not provide cover if the loss of such points or their value can be recovered from any other source."
Travel with Kit logo"The loss of frequent flyer points you used to purchase an airline ticket if the airline ticket is cancelled and you cannot recover the lost points from any other source."
Travel with jane logo"The loss of frequent flyer points you used to purchase an airline ticket if the airline ticket is cancelled and you cannot recover the lost points from any other source."
Virgin money travel insurance logo"For the value of frequent flyer points, air miles, loyalty card points, redeemable vouchers or other similar schemes lost by you as a result of cancelling the services paid for with those points, air miles, vouchers or schemes, but only if you cannot recover your loss in any other way."
Webjet logo"The value of frequent flyer or similar flight reward points, air miles, redeemable vouchers or similar schemes lost by You following cancellation of the services paid for with those points, if You cannot recover Your loss in any other way."
Worldcare logo"For the value of frequent flyer points, air miles, loyalty card points, redeemable vouchers or other similar schemes lost by you as a result of cancelling the services paid for or obtained with those points, air miles, vouchers or schemes, but only if you cannot recover your loss in any other way."
World2cover logo"Where an airline ticket was purchased using frequent flyer or similar air points, We will pay You for frequent flyer or similar air points lost following cancellation of Your air ticket."
Zoom logo"We will pay you the value of any frequent flyer or similar air travel points you used to purchase an airline ticket following cancellation of that airline ticket due to unforeseen circumstances outside of your control, if you cannot recover the lost points from any other source."

How will travel insurance pay you for frequent flyer points?

How you'll be reimbursed and how much you will be reimbursed for will vary from insurer to insurer. Often, you'll receive the cost of an equivalent airline ticket. Others will reimburse you the frequent flyer points you used to pay for the ticket.

The amount an insurer will pay is generally calculated as follows

  • The cost of an equivalent class airline ticket, less your financial contribution towards the airline ticket.
  • Multiplied by the total amount of points lost
  • Divided by the total amount of points redeemed to obtain the airline ticket.

Example:

Equivalent class advance purchase airfare = $1,000

Points lost = 5,000

Points redeemed to obtain original ticket = 20,000

Claimable amount = $1,000 x 5,000 divided by 20,000 = $250

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