Allianz insurance - frequent flyer point bookings

[OzEire]

Keen for your thoughts on this Allianz insurance PDS quote:

2.1.1 If during the period of cover, your journey is cancelled, rescheduled or shortened because of circumstances that were not expected or intended by you and are outside your control we will reimburse you:

b] 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.

We calculate the amount we pay you as follows:
i) for frequent flyer points, air miles or loyalty card points:
• the cost of an equivalent booking based on the same advance booking period as your original booking less any payment you made toward the booking, multiplied by
• the total number of points or air miles lost, divided by the total number of points or air miles used to make the booking.
ii) for vouchers, the face value of the voucher. If there is no face value on the voucher we pay the market value.

So, roughly... if you book a U (Points business) points ticket for 128,000 points, and the "equivalent booking" made in a J (Revenue business) ticket made on the same day was say $6,400. This seems to work fine for single sector trips, but no idea how they would apply this to a RTW or multi leg booking.

It could also be read to mean you get some points back from the airline (yeah, right), and receive credit the difference in "lost" points.

Any help is welcome.

 

[MJHoops]

Is this a hypothetical / planning how this would work if it happened

Or can you supply details of the whole journey and which part cancelled etc?

 

[OzEire]

Is this a hypothetical / planning how this would work if it happened

Or can you supply details of the whole journey and which part cancelled etc?

Hypothetical, just trying to figure out how insurers deal with points bookings.

 

[MJHoops]

My take
1. You have to try to get the points and taxes/charges back on the cancelled segment from the airline
2. Failing that, they will work out a points value for the whole booking, and then give you a dollar figure referable to the proportion

Query how the airline, or insurer, works out what proportion of points are referable to that segment

 

[Mattg]

I take it to mean you'd receive the equivalent airfare cost as compensation.

So using the example of a one-way J reward costing 128,000 points + $500 in taxes, for a seat that retails for $6,400. My interpretation of the PDS is that you could expect to receive:

$6,400 - $500 = $5,900
($5,900 * 128k)/128k = $5,900

If you lost only one leg of a multi-journey booking, I assume the calculation would look a bit different. E.g. say it was a return booking costing 256,000 points + $1,000 taxes for something that retails for $9,000 round-trip, and you lost only the return leg due to some event outside your control. I would take the calculation as:

$9,000 - $1,000 = $8,000
($8,000 * 128k)/256k = $4,000

I'm not sure if this is how it really works or if I'm missing something though? Based on this formula, you would never recover the taxes & carrier charges (since the original amount is calculated "less any payment you made toward the booking").

 

[OzEire]

I agree with your interpretation @Mattg . I guess the concern is that halfway through a trip a (flight booked with points) connection is missed or flight cancelled - where do you stand? It seems clear from a commercial booking that you would get moved along to the next destination somehow - airline takes responsibility and makes alt arrangements, or travel insurance kicks-in and you can claim some of the cost of a new booking. I worry that if the airline says "no reward seats available - bad luck, but we can't offer you a revenue ticket on that fare." and travel insurer says, well the airline refunded your points so we don't pay anything. I'm stuck with refunded points, no seats available and sky high last minute ticket costs.

 

[rijaj]

I agree with your interpretation @Mattg . I guess the concern is that halfway through a trip a (flight booked with points) connection is missed or flight cancelled - where do you stand? It seems clear from a commercial booking that you would get moved along to the next destination somehow - airline takes responsibility and makes alt arrangements, or travel insurance kicks-in and you can claim some of the cost of a new booking. I worry that if the airline says "no reward seats available - bad luck, but we can't offer you a revenue ticket on that fare." and travel insurer says, well the airline refunded your points so we don't pay anything. I'm stuck with refunded points, no seats available and sky high last minute ticket costs.

Eager to hear any insights from anyone regarding this. I may have the same problem in the future.