Pros and cons for your trip

  • Cancellation insurance for any reason is a type of add-on to travel insurance.
  • It allows you to cancel your trip and get a refund of up to 75% of your expenses for any reason.
  • CFAR insurance typically increases your premium by 40% to 50%.

No one wants to cancel a trip – especially an expensive one. But sometimes it is necessary. You might get sick, have a family emergency, or simply find yourself unable to take time off from work.

Whatever the issue, travel insurance — especially a plan that allows you to cancel for any reason — can help minimize the financial damage caused by a trip cancellation. Here’s what you need to know about this type of travel insurance.

What is trip cancellation insurance for any reason?

Travel insurance is a type of insurance policy that protects you against various losses that may occur while traveling. Although most standard policies cover trip cancellation, it is usually limited to specific scenarios – such as illness or natural disaster.

If you add cancellation for any reason (CFAR) coverage, you can cancel almost anything as long as you do it within the required time period. You must usually cancel at least two days before the scheduled start of the trip.

“Any reason cancellation benefit means you can cancel your trip for reasons other than those listed on your plan,” says Jeff Rolander, director of claims at Faye, a travel insurance provider. “Adding CFAR protection to your travel insurance plan helps give you peace of mind knowing you have the ability to cancel your trip if you just don’t feel like going.”

How much is cancellation insurance for any reason?

The cost of CFAR travel insurance varies by provider and depends on the age of travelers, destination, length of trip and other details. In general, you can expect to pay between 40% to 50% more when you add CFAR coverage.

Here’s a look at how much CFAR cover costs with three different travel insurance providers. These offers are for a one-week trip to Mexico worth $5,000 for one person (age 30).

Will you get a full refund if you cancel your trip?

While CFAR insurance allows you to cancel your trip for any reason, it will not reimburse you 100% of your costs if you do. Typically, insurers will reimburse 60% to 75% of your travel costs, but this percentage varies by provider.

“There are no CFAR policies that provide 100% reimbursement,” says Megan Moncrief, chief marketing officer at SquareMouth.

Still, 75% can make a big difference if you’re forced to cancel a trip. For example, if you paid $10,000 for a trip to Hawaii and then had to cancel it because your babysitting arrangements fell through, you’d only lose $2,500 — instead of the $10,000 loss you would have seen without CFAR coverage.

Can you use CFAR coverage for cancellation due to coronavirus?

Standard travel insurance will likely reimburse you if you contracted COVID-19 before the trip, but not if you canceled the trip due to exposure or fear of contracting the virus while traveling.

Fortunately, CFAR covers these cases. If you have to cancel due to COVID-related border closures, travel restrictions, recent exposure to danger, or even fear of exposure to danger during your trip, CFAR will reimburse you.

“CFAR is a great option for travelers who need to cancel travel for reasons related to COVID – beyond contracting the virus,” says Moncrief.

4 myths about cancellation insurance for any reason

1. CFAR is worth it for any trip, regardless of cost

CFAR adds significantly to the cost of travel insurance, so it may not be worth it on shorter, cheaper trips or ones you’re unlikely to cancel (like a trip to your own wedding, for example).

If you’re taking a particularly long or expensive trip, it might be worth it – especially if there are any concerns you might have to cancel. If you want the freedom to opt out due to concerns related to COVID, that might be smart, too.

“CFAR is worth the money if the traveler has a very specific concern that can’t be covered otherwise,” says Moncrief. “CFAR has proven popular during the pandemic as a way for travelers to prepare for the ever-changing travel landscape.”

2. CFAR costs a lot of money

Although CFAR coverage makes your travel insurance more expensive, you’ll still pay about $100 or less in most cases. As you can see in the chart above, a typical CFAR policy costs about $60 to $130 — in addition to your basic travel insurance per person.

3. My credit card offers trip cancellation coverage, so CFAR is never worth it

Although many credit cards come with travel benefits, they are often limited in scope. The Chase Sapphire Preferred card, for example, won’t reimburse you for trips canceled due to a “change in plans or financial circumstances.” The American Express Platinum card covers cancellations due to injury, illness, bad weather, acts of terrorism and other reasons covered by most major travel insurance plans. However, in comparison, CFAR offers much wider coverage and protection.

4. You can purchase a CFAR at any time before the start of your trip

You should purchase CFAR coverage soon after you book your trip. Most companies require you to purchase within 15 to 21 days of making an initial deposit. After that point, you will not be able to add CFAR coverage to your policy.

Shop for your CFAR coverage

If you do choose cancellation coverage for any reason, be sure to shop around for your policy. Each provider offers different plans and fees. Comparing at least a few options can help you get the best price and coverage for your needs.

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