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Warren Buffett’s Berkshire Hathaway has entered the travel insurance business with coverage that compensates travelers for flight delays; excessive waits on the tarmac; lost, stolen or delayed luggage, and missed connections.
All at a rate of $25 per trip for U.S. domestic flights.
With some limitations, even if inclement weather leads to flight disruptions, Berkshire Hathaway Travel Protection’s new AirCare plan pledges to compensate travelers $1,000 for tarmac delays greater than two hours, $1,000 for lost or stolen luggage, $500 for mixed connections due to a flight delay, $500 if luggage arrives more than 12 hours’ late, and $50 if a flight is delayed for more than two hours.
And, here’s another interesting twist, Mike Meeks, BHTP’s chief operations officer, says in most cases travelers don’t even have to submit claims for flight disruptions because the company uses a flight-tracking service, and knows when a flight is delayed for more than two hours, for example. [See SkiftStudio interview with Meeks below.]
The company pledges to simply notify the traveler via their smartphones and then deposit the payment in their PayPal accounts or send an electronic payment to their bank accounts, Meeks says.
“I know how long you’ve been on the tarmac,” Meeks says.
While other travel insurers may cover some elements of AirCare’s coverage, BHTP argues that its coverage is more comprehensive, and the way it is delivered is unique in North America.
Of course, there is fine print to the coverage. AirCare can be purchased up to an hour before the flight’s scheduled departure, but coverage won’t be considered valid if the flight has already been delayed or cancelled because of weather, for instance. You can get more information about the coverage here.
The service is available on the web and via Android and iPhone apps.
BHTP doesn’t yet offer traditional travel insurance, but begins with the AirCare product after conducting market research that determined that travelers want help with the everyday annoyances or challenges of air trail, Meeks says.
AirCare covers domestic flights only for now, and additional travel insurance products will be coming, Meeks says.
How does Berkshire Hathaway get into the travel insurance business?
The president of BHTP is John Noel, the founder of Travel Guard. American International Group acquired Travel Guard in 2006, but didn’t acquire another business that Noel had developed, MyAssist, which today provides driver assistance and/or travel concierge services to the likes of Mercedes-Benz USA, Ford Motor Co., Airbnb, and Allstate Insurance.
Berkshire Hathaway acquired MyAssist early this year, and BHTP’s current product lineup includes AirCare and MyAssist.
Following is the SkiftStudio interview with Mike Meeks, chief operations officer of Berkshire Hathaway Travel Protection: