Cancel for Any Reason (CFAR) Travel Insurance
It’s not often that the phrases “travel insurance” and “easy to understand” are used in the same breath, but here it goes: Trip Cancellation coverage is one of the easiest parts of travel insurance to understand – especially when the subject is cancel for any reason travel insurance.
For all its simplicity, Trip Cancellation For Any Reason coverage is a conundrum. It’s one of the most asked-about travel insurance coverages yet one of the least frequently purchased. Everyone wants cancel for any reason coverage, but few end up buying it.
Before we get into why that is, let’s talk a little about how Trip Cancellation travel insurance coverage works when it doesn’t include “cancel for any reason.”
Tip: You may see Cancel for Any Reason coverage called CFAR travel insurance.
Trip Cancellation vs. Cancel for Any Reason
Any travel insurance plan that covers Trip Cancellation and Trip Interruption details the covered reasons for Trip Cancellation and Interruption in a section titled Covered Reasons For Trip Cancellation and Interruption, or similar limitations of the coverage.
Those covered reasons usually fall into the following categories:
- Health, sickness, and death;
- Transportation failure;
- Weather and natural disasters;
- Work reasons; and
- military reasons.
However, Cancel For Any Reason sweeps away all these categories in one fell swoop. If you want to cancel your trip for any reason – any reason, from a hangnail to a hurricane – you can.
That sounds amazing, right? Well, because it sounds amazing, there must be a catch.
Realities of Cancel for Any Reason Coverage
Actually, a few things bring cancel for any reason trip insurance back down to earth:
1) It’s expensive. Expect to pay a good deal more for travel insurance when adding on the Trip Cancellation For Any Reason coverage. Why so much? The expectation is that if you buy cancel for any reason coverage, you’re more likely to use it.
Also read: How Much Does Travel Insurance Cost?
2) It only pays a percentage of the penalty amount. With many plans, like Generali’s Premium plan, where it is an add-on option, Trip Cancellation for Any Reason will reimburse travelers up to 60% of the penalty amount for their trip. With expensive trips, the combination of an about an extra 50% in premium and only 60% penalty amount reimbursement is often a deal-breaker.
3) Trip Cancellation for Any Reason coverage is not available to residents of New York.
There are also some eligibility requirements for cancel for any reason travel insurance coverage, which can only be added to our Premium plan:
- You have to buy it within 24 hours of making your initial trip deposit.
- You must cancel your trip 48 hours or more before you’re scheduled to leave.
- You must insure all of your nonrefundable trip costs.
- Your per-person trip cost is no more than $10,000.
- You were physically able to travel when you bought the coverage.
- All insured travelers under the coverage need to cancel in order to use the coverage.
When to get Trip Cancellation for Any Reason
Given that it costs a lot and doesn’t pay back all that much, when and why would you want to have travel insurance with cancel for any reason coverage? Several scenarios come to mind:
1) When you’re not paying the bill. A business trip is a perfect example. If a client changes her mind about meeting with you, it’s nice if you can get a little something back.
2) When you’re headed into dangerous territory. Let’s take central Africa. The State Department is always putting on and taking off Do Not Travel notices to this part of the world – but sometimes the reasons why don’t fall under the covered reasons for cancellation. When the threat of something happening is great but nothing’s happened yet, cancel for any reason coverage can help you get back a good portion of your trip cost.
3) When your trip is expensive but not that expensive. Think of that last example, but with the insurable expenses being airfare and a couple of nights in an inexpensive lodging. If you’re paying a 50% premium on a $200 plan, CFAR is relatively affordable and logical.
4) When you’re young. Not only do travel insurance premiums tend to be lower for younger travelers, but younger travelers tend to spend less on their travels – and they’re more impetuous. That combination makes Trip Cancellation for Any Reason much more attractive.
5) When your trip isn’t set in stone. You bought on a whim; you might want to have the ability to cancel on a whim. Keep in mind, you still need to cancel at least 48 hours before your trip in order to qualify for coverage.
6) When you’re going on your honeymoon. Unfortunately, getting left at the altar is not a covered reason for cancellation in most cases. If you’re thinking one or both of you might get cold feet, a CFAR travel insurance option might be a good idea.
If the flexibility of being able to cancel for any reason appeals to you, be sure to read a sample Description of Coverage/Policy so you really understand what you’re getting, and contact the insurance company if you have doubts or questions. It’s the important first step toward a positive travel insurance experience.