Berkshire Hathaway’s AirCare Travel Insurance — Is it Worth the $25?

Berkshire Hathaway recently rolled out an interesting new concept for travel insurance called AirCare.

This relatively straightforward travel insurance plan costs $25 per direction of air travel and pays out the following in the case of travel snafus:

• $50 per 2-hour flight delay
• $500 per missed connection
• $500 per delayed bag (more than 12 hours)
• $1,000 per lost bag
• $1,000 for a 2+ hour tarmac delay

The glaring omission here is the lack of coverage of flight cancellation.   

For now, only domestic flight itineraries are eligible for this travel insurance, and the $25 premium appears to be per direction of travel, including stopovers.  It also appears that these claims are cumulative, so if one has a 2+ hour tarmac delay that results in a missed connection, the payout would be $1,500.

Another feature of this insurance plan is that it can be purchased at ANY time up to one hour prior to the flight.  Policies cannot be purchased for itineraries that have a weather advisory for either the outbound or destination cities though.

AirCare also comes with a nifty app for iPhone and Android, and includes “real-time” flight monitoring and a concierge who can be contacted in the case of missed connections, etc.   The plan also touts instant payment of claims to one’s bank account, though a quick search of reviews indicates a somewhat more complicated claims process.

It doesn’t take a rocket scientist to see how savvy travelers could potentially exploit this plan, so I do wonder if any tweaks will be made to the plan as time goes on.  Though I haven’t personally used this, it could potentially be a good way to hedge a bad travel itinerary with a close connection, and is a very interesting alternative to a traditional travel insurance policy.  One still needs to keep in mind that this IS after all, insurance — so the actuaries have already done the math to ensure that Berkshire Hathaway will ultimately come out on top in the long run.

As a word of caution, there are several questions or gray areas that aren’t covered on the website, such as what happens when the airline proactively re-books you on to a different flight as a result of a missed connection — would BH consider this a missed connection, or the scheduled itinerary?   This could make the claims process MUCH less straightforward.

Has anyone used the Berkshire Hathaway AirCare plan yet?  If so, how was the experience?  Were claims paid in a straightforward manner?