Get paid $500 if you miss a connecting flight – what’s the catch?

There’s a new disruptive flight insurance product on the market, and it’s from a smart name you know – Warren Buffett’s Berkshire Hathaway.

It ‘s called AirCare and costs just $25 per trip.

Here’s what you get:

• $500 if you miss your connecting flight because the first flight was delayed – instantly sent to you
• $1,000 if your plane is stuck on the tarmac for 2+ hours – sent in real-time
• $50 for 2+ hour delays of your departing or connecting flight
• $500 if your baggage is delayed 12+ hours
• $1,000 if your baggage is lost or stolen

You can buy the coverage right up until one hour before your flight departs, so you’re not stuck making the decision when you first purchase your flight.

The real-stand out here is the $500 payout if you miss your connecting flight.

Any seasoned traveler knows these happen more often than you’d like. So getting $500 for a routine problem with just $25 upfront sounds like it must have a catch.

Here’s what we’ve found so far…

• It applies to any kind of delay
• Only domestic trips are covered
• If the delay was known at the time you bought the coverage it won’t apply
• If there is a known severe weather event at your origin or destination when you buy the coverage it won’t apply, even if your flight isn’t yet delayed (for example a weather waiver gets issued by the airline a day in advance)
• It’s not available if you live in California or a few other states
• You can’t get the $25 refunded if you buy within 30 days of your flight

Those are all pretty reasonable, but there’s a big missing piece of coverage

AirCare won’t take give you much if you have a big delay on a nonstop flight.

For example, let’s say your flight home is delayed overnight because of a snowstorm and it was a nonstop flight.

The only help you’ll get is $50 for a 2+ hour delay.

And a lot of people got stuck in that situation this past winter, with delays of several days away from home, forcing them to pay hundreds of dollars in hotel bills the airlines won’t cover.

Instead, you should consider the coverage that comes from the best travel rewards cards, like the Chase Sapphire (which has no annual fee).

With the Sapphire  you’ll get Trip Delay coverage of up to $500 if any of your flights, even nonstop ones, are delayed more than 12  hours.

They won’t put cash in your account right away – you’ll have to file a claim. But it won’t cost you anything extra as long as you book your flights with your card and it will apply on nonstop and connecting flights, as well as international flights. Things the $25 AirCare coverage won’t cover.

But if you fly a lot of connecting flights it can be generous

If you’re a road warrior taking 20 trips a year with connecting flights, you only need one trip to have a missed connection for the coverage to pay itself back (20 trips X $25 = $500). And you can be selective, and for example only take the coverage on trips with tight connections.

It also looks like AirCare is relying on the public flight status data provided by the airlines. And as anyone who travels a lot knows, that isn’t always updated as quickly as conditions warrant.

So if you see that the inbound aircraft for your flight is arriving really late but your own flight status hasn’t updated to show delayed yet, you could buy the coverage, up to one hour before departure.

Sure, there’s a chance that the airline could swap out the late plane for another one, but if you fly often you can get a sense for when things may go awry well before the one hour cutoff. Of course if there is severe weather at your origin or destination airport it won’t apply if you buy the coverage last minute, but if a plane from another city is late and weather is good where you are then it can still apply.

Really obsessive people will say you can buy the coverage and never fly, since they don’t look at your ticket, instead looking at the public status of the flight you choose for the automatic reimbursement.

But there’s a word for that – insurance fraud. And there’s another word for that – a crime.

For really heavy travelers who connect a lot though there is potential for some good value out of this. You’ll be subsidized by the occasional flyer who has a long connection or nonstop flight but really wants peace of mind.

And here’s how it it triggered…

Let’s say your flight is scheduled to land at 8:30am with a connection at 9:40am. Instead it lands at 9:45am, after your connecting flight has already left. Then you’re automatically reimbursed to your PayPal or bank account.

If your flight instead lands at 9:20am in that case, giving you 20 minutes to reach the next flight, but you make it to your gate and find the flight has already closed, you won’t be automatically reimbursed. But you can file a claim online or with your phone. They’ll also help with rebooking.

What’s the verdict?

If you fly frequently with tight connecting flights, AirCare is worth trying out.

But if you’re a leisure flyer you might be better off saving $25 and paying for your flights with a rewards card like the Chase Sapphire or Sapphire Preferred, which offers better Trip Delay coverage and similar levels of baggage protection at no extra cost. Sure, you have to file a claim, but that’s not hard.

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