Should you get ‘cancel for any reason’ travel insurance?
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Updated 7:05 p.m. UTC Jan. 12, 2024
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Key points
- “Cancel for any reason” travel insurance allows you to cancel your trip for any reason up to two days prior to your scheduled departure.
- Depending on your plan, you’ll be reimbursed up to 50% or 75% of the insured prepaid, nonrefundable trip cost.
- CFAR is an add-on to a standard travel insurance plan and can’t be purchased separately.
- CFAR must be purchased within a specific time frame — which varies depending on the policy — from when you make your first trip deposit.
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Even if it wasn’t before the pandemic, travel insurance is likely on your radar now for upcoming trips.
Travel insurance can help you recover all kinds of expenses, including lost funds and unexpected costs due to injury or sickness while traveling, trip interruptions or cancellations, lost or delayed luggage and rental car damage.
However, most basic travel insurance plans have a specific list of qualified reasons that allow you to receive reimbursement for a canceled trip. If your reason doesn’t fall under that criteria, you’re not covered.
Enter “cancel for any reason” travel insurance or CFAR. This is an optional add-on coverage you purchase with a basic travel insurance policy so that you can, well, cancel your trip for any reason.
“The decision to purchase CFAR really comes down to the level of concern a traveler has for things that can disrupt a trip that aren’t covered under a standard plan,” said Stan Sandberg, co-founder of TravelInsurance.com.
Here’s what to know about how CFAR policies work, what’s covered, how much they cost and how to figure out if CFAR makes sense for your next trip, especially if you’re traveling on a budget and trying to pay attention to costs.
How does “cancel for any reason” travel insurance work?
While it sounds simple enough, there are rules you have to follow when it comes to getting a CFAR policy, including when you need to purchase it, when you need to cancel by for reimbursement and how much you’ll be reimbursed.
CFAR coverage must be purchased as an add-on at the same time you buy your travel insurance plan, said Scott Adamski, head of global product development at AIG Travel. Adamski noted the maximum trip cost that can be covered with CFAR is $25,000.
When you make subsequent nonrefundable payments toward your trip, you must add those amounts to your travel insurance coverage to preserve the CFAR option, Sandberg said.
If you need to cancel, you must cancel the trip at least two days (48 hours) before the scheduled departure. And “cancel for any reason” really means just that — you can even cancel without a reason.
How reimbursements work depends in part on your base travel insurance plan. If your cancellation is a result of one of the listed covered reasons under that plan, your reimbursement for your nonrefundable, prepaid insured trip costs is 100%. If your cancellation is due to any reason other than a listed covered reason in the plan, then you would cancel under CFAR and the reimbursement would be up to 50% or 75% of the insured prepaid, nonrefundable trip cost, depending on the plan.
How much does “cancel for any reason” travel insurance cost?
Depending on the plan, adding CFAR to a comprehensive travel insurance policy — which typically costs 4% to 10% of your trip costs — can add another 40% to 60% of the base policy cost, said Megan Walch, product manager at InsureMyTrip. For example, if the base policy cost is $100, CFAR may be an additional $40 to $60.
It’s important to note that CFAR travel insurance is purchased as an add-on to a basic travel insurance plan — it can’t be purchased separately. So you’re paying the cost of whatever your standard plan is, plus the cost of adding on CFAR.
When “cancel for any reason” insurance makes sense
Adding CFAR to your travel insurance may make sense if you are concerned about COVID disrupting your plans. “A standard trip cancellation plan will not cover a government-imposed travel ban or border closing. That’s where CFAR comes in,” said Sandberg.
It is also the only option that may cover cancellation due to fear of traveling, said Walch. “For example, if you want to cancel a trip because of a spike in COVID-19 cases in the country to which you are traveling, “cancel for any reason” is your best option.”
Matthew Kepnes, founder of the popular travel blog Nomadic Matt and author of How to Travel the World on $50 a Day said this type of coverage is great for travelers planning expensive trips or travelers with health concerns that might impact their plans.
“For example, most luxury trips and cruises require a deposit that is nonrefundable. If something happens and you have to cancel your trip, you’ll lose out on that money,” Kepnes explained. “That’s where “cancel for any reason” insurance comes in. It’s usually more expensive than regular travel insurance, but if your trip is going to cost thousands of dollars then getting comprehensive insurance is a no-brainer.”
Is CFAR travel insurance right for you?
“If your travel concerns fall outside the standard cancellation coverage in a plan, then CFAR can provide a measure of protection for your investment,” said Sandberg.
But it’s important to understand what a standard plan covers and if it makes sense to pay more for CFAR.
For example, AIG Travel policies have numerous “covered perils” that would allow you to cancel your trip — even last-minute — and still be covered, Adamski pointed out. This includes certain medical emergencies. For example, if you got in an auto accident and suffered a broken leg the day before your scheduled departure and can’t make the trip.
“CFAR is a pre-departure benefit, so a traveler would only be able to make a claim related to CFAR more than 48 hours prior to departure,” said Adamski. “Once the traveler has embarked on their trip, CFAR no longer applies.” Some travel insurance plans offer an “interruption-for-any-reason” upgrade to cover reasons you may want to end your trip early.
So should you get CFAR insurance? A travel insurance agent or travel agent can help you run through the pros and cons. But two key questions that can help you determine if CFAR is a good option for you are:
- Are there many nonrefundable aspects to your trip, such as a prepaid hotel room, cruise deposit or concert tickets?
- If you’re purchasing a standard travel insurance plan, what’s covered and how likely is it that you’d cancel for something outside of those restrictions?
Getting detailed answers for each of these questions will help you decide if you should get CFAR. As with any insurance product, be sure to shop around and compare prices and coverage before you purchase a policy.
Compare the best travel insurance offers
Travel Insured
Top-scoring plan
Worldwide Trip Protector
Covers COVID?
Yes
Medical & evacuation limits per person
$100,000/$1 million
WorldTrips
Top-scoring plan
Atlas Journey Preferred
Covers COVID?
Yes
Medical & evacuation limits per person
$100,000/$1 million
Seven Corners
Top-scoring plan
RoundTrip Basic
Covers COVID?
Yes
Medical & evacuation limits per person
$500,000/$1 million
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