Cancel ‎for Any Reason Travel Insurance: Is it Worth it?

Any travel insurance plan that covers Trip Cancellation and Trip Interruption includes specific covered reasons, 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.

While it’s true that cancel for any reason coverage will pay your claim even if you cancel a trip because of a pretend hangnail, what you may not know is that CFAR will not pay you back all the money you’ve invested in your trip.

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.

See the difference? Traditional travel insurance has fewer covered reasons for canceling but can pay back all non-refundable insured trip costs; travel insurance with Trip Cancellation For Any Reason has an infinite number of covered reasons, but only pays back a percentage of the penalty amount.

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.
• 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.
• The Trip cost per person is no more than $10,000.

Let’s do the math on all of that to see if travel insurance with Cancel For Any Reason coverage is really worth it.

Suppose your trip has a trip cost of $1,000, and you paid a $500 deposit when you bought the insurance. And let’s say the insurance plan costs $100, or 10% of your insured trip cost – a little low for a CFAR plan, but close enough for our calculations.

Remember, you only paid half of the trip cost, so you have $500 left to pay. If you cancel your trip before making your final payment, you’d only receive 60% of the $500 you paid initially – and you still might owe the final payment to your travel supplier.

In other words, you will have paid $100 plus $500 for the ability to get back about $300 for whatever reason – with the specter of paying another $500 down the road.

Even if you buy a CFAR plan because you’re afraid of getting COVID-19, spending $1,100 to get back roughly $300 doesn’t seem like the best way of addressing your fear. This is why many people ask about travel insurance with cancel for any reason, but only a handful actually buy the product.

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 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.

2)    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 the cost of travel insurance isn't too pricey, the extra cost for CFAR can be relatively affordable and logical.

3) If you’re pregnant. Travel when you’re pregnant can be fraught with complications. 

Most travel insurance plans, including Generali’s, exclude any kind of normal pregnancy or childbirth. Meaning any claims related to travel issues stemming from pregnancy will most likely not be paid. By adding CFAR coverage to our Premium plan, as long as you are not disabled from travel at the time you buy the insurance and meet other requirements, you may get reimbursed for a majority of your trip costs if you’re pregnant and decide to cancel your trip.

4) If you have a new job or are self-employed. Involuntary job loss is a covered reason for Trip Cancellation, but you have to be on the job for one year or more for the coverage to be effective. Also, if you’re an independent contractor, a temporary employee, or are self-employed, coverage under that covered event is unavailable. With CFAR we don’t ask why you are canceling your trip, so any job-related reason for canceling your trip is covered.   

5) 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.

6)    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 and all other insured’s still need to cancel at least 48 hours before your trip in order to qualify for coverage.

7)    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. Keep in mind, both of you must cancel at least 48 hours before your trip in order to qualify for coverage.

Also read: Two Situations Where CFAR Travel Insurance is Really Needed

If the flexibility of being able to cancel your trip for any reason appeals to you, get a quote, fill out the Trip Cancellation For Any Reason portion of the form, and see if CFAR is worth it for you.