Travel insurance is a great way to ensure you don’t lose out financially if you have to cancel your trip. The insurance can reimburse you 100 percent for any prepaid, non-refundable deposits. To make a claim, however, you must be canceling your trip for a reason listed in the policy. Usually, things like illnesses are acceptable reasons for canceling, and your insurance will cover the cost of your lost trip.
However, what if you need to cancel your trip for a reason that isn’t covered under your travel policy? In general, if your reason for cancelation isn’t covered under the policy terms, you will not receive payment for your trip. This is where a “cancel for any reason” policy would be beneficial. As the name suggests, if you need to cancel your trip for any reason, “cancel for any reason” coverage (CFAR) can help. CFAR travel insurance allows you to cancel and generally provides 75% reimbursement of your non-refundable trip costs. While this is a great tool to have if you are traveling, many people don’t fully understand CFAR insurance. Let’s take a closer look at this kind of travel insurance and how it works.
How does CFAR insurance work?
“Cancel for any reason” travel insurance policies are designed to protect your travel investment in the event that you need to cancel your trip for a reason not covered by your standard travel insurance policy. These policies usually offer reimbursement for prepaid, non-refundable expenses incurred up to the time of cancellation. Some common reasons people might buy a CFAR policy include last-minute schedule changes, family emergencies, or rising COVID numbers in a particular area.
To get CFAR coverage, you will need to purchase a standard travel insurance plan first. Once you decide on a travel insurance plan, you can add on “cancel for any reason” coverage during a certain time frame permitted by your insurer. The deadline for adding coverage will vary by insurer but is usually around 14 days after you purchase a standard policy.
Typically you have to cancel your trip more than 48 hours before your scheduled departure in order to make a CFAR claim. If you do, however, you can be reimbursed for around 75 percent of your pre-paid, forfeited, and non-refundable trip costs. The reimbursement rate varies by insurer and will be listed in your policy.
How much does CFAR travel coverage cost?
There are a variety of factors that will affect the cost of your travel insurance policy, including the age of the traveler, the length of the trip, and the destination. Generally, the cost of travel insurance increases with the amount of coverage you choose. Usually, the cost of a base travel insurance policy is around five to six percent of the total cost of your trip.
“Cancel for any reason” travel insurance is an add-on coverage option to a standard travel insurance policy. As a result, you will pay more than the cost of regular travel insurance, but it can be worth the price if you’re concerned about being able to get a refund if something comes up. In general, CFAR coverage can add as much as 85 percent to the cost of your travel insurance. However, the average increase is around 50 percent.
What are the restrictions of CFAR travel coverage?
If you want the flexibility to cancel your trip for any reason, CFAR coverage can help. “Cancel for any reason” travel insurance policies have very few restrictions on why you cancel your trip. You can cancel your trip for any reason not covered by your standard policy and receive reimbursement. Perhaps you have developed a fear of flying, or you have read several poor reviews about your destination; as long as you have CFAR coverage, you can receive reimbursement for most of your trip.
As discussed, there is usually a time frame when you can cancel a trip, and for most policies, that is up to 48 hours prior to your departure. Depending on your specific policy, you will only be reimbursed for a certain percentage of your trip cost, and you might need to provide documentation under certain circumstances. You will want to pay attention to the policy’s fine print and know the deadline for canceling your trip if you buy “cancel for any reason” travel insurance.
If you decide to purchase “cancel for any reason” travel insurance, be sure to keep the policy in a safe place. If you need to cancel your trip, you will need to provide proof of the policy to the travel insurance company in order to receive a refund. Overall, “cancel for any reason” travel insurance is important because it can provide coverage for a number of different situations that may arise while you are traveling. This type of coverage can give you greater peace of mind knowing that your investment in your trip is covered no matter what happens.