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AirCare devalues a big benefit. Is it still worth it for flight delay coverage?

by on Wed October 22, 2014 • No Comment

AirCare, the new flight insurance coverage provided by Berkshire Hathaway, launched with a splash in May thanks to a juicy benefit: $500 paid to you anytime you miss a connecting flight.

All you had to do was buy the coverage for $25. And you could buy it right up until the time of your flight.

The only catch was a delay couldn’t be already posted for your flights.

That sounds too good to be true, and turns out it was.

They sent out this letter to customers last week:

The payout has been cut in half to $250, but the upfront price of $25 hasn’t changed.

They’ve also added a requirement that you book the coverage 24 hours in advance of your flight.

Why did they do this?

Well, it was easy for some intrepid fliers to buy the coverage last minute on flights they knew had a good chance of being delayed.

For example, you can often see when the flight coming into your gate is late, even though your departing flight is still showing on time.

Airlines are slow to update flight status, and as experienced travelers can attest, a late flight coming into your gate means it’s almost certain your departing flight will be late, leading you to miss a connection. So it was possible to pay $25 for an 80% or higher chance you’d get paid $500.

Is the coverage still worth it?

Sadly, we think AirCare had a hunch that the $500 benefit was too generous, but that it would help generate outsized publicity when it launched.

The remaining AirCare benefits are actually pretty lackluster and good for minor inconveniences but not the biggest headaches.

For example, delays of 2 hours or more get you a payout of $50, which will help you get into a lounge or buy food, but won’t do much good if you’re stranded and paying for a hotel.

In fact, many credit cards will give you a payout of $500 for delays of 12 hours or more if you book your ticket with them, automatically and for free.

These include the no annual fee Chase Sapphire.

That’s real help for big delays, enough to cover hotel expenses on an night when everyone is scrambling to avoid sleeping in the terminal.

We’d pass on AirCare.

For a new brand, they’re not earning goodwill by cutting benefits just a few months in and not adding anything new to the value proposition.



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