Many people are starting to get the travel bug again and planning vacations that include travel to different states and countries.
However, due to residual effects of the recent pandemic, there are many unexpected situations that can arise, including illness, emergencies, switching jobs and losing vacation time, or simply changing your mind.
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But if you have already booked your flight, hotel or other events and need to cancel, and you are unable to secure a refund, or rescheduling is not currently an option, what happens to your hard-earned money?
How will you recoup financial losses associated with travel deposits and other items that aren’t covered by a basic trip insurance policy?
The Solution: Cancel For Any Reason Insurance
The optional Cancel For Any Reason (CFAR) add-on benefit offers coverage for the types of situations described above, particularly as it’s related to reimbursement for refundable trip costs and certain nonrefundable deposits.
CFAR insurance expands the benefits of basic trip cancellation insurance, but these two types of insurance are distinctly different.
Trip cancellation insurance covers specific, unforeseen incidents like injuries or illnesses, natural disasters, lost passports or other covered issues beyond the insured’s control. But only CFAR allows you to cancel your trip plans and recoup prepaid travel expenses that would have otherwise been nonrefundable.
What Does Cancel For Any Reason Cover?
Different policies offer varying levels of coverage. In general, though, Cancel For Any Reason coverage is a supplemental option to add to traditional trip insurance plans, and can help travelers get reimbursed for costs not otherwise covered in their regular cancellation policy. Money spent for things like pre-paid trip deposits, transportation or lodging doesn’t have to be lost just because you have to cancel your trip for a reason not covered by regular trip cancellation insurance.
By adding CFAR insurance to your trip insurance, you’re giving yourself the freedom and peace of mind that comes from knowing you can cancel your plans for any reason (even if you just don’t feel like going) and still recoup financial expenses.
It is important to note that trip insurance is only available to American citizens.
Basic Trip Insurance vs Trip Insurance with CFAR
If you need to cancel your trip, under a basic plan, you’re only covered under a limited number of circumstances whereas a basic insurance plan generally gives you 100% reimbursement if any of these three situations force you to cancel your trip plans. But you won’t be protected for any other reason.
However, when you purchase CFAR with your insurance plan, you can, like the name suggests, cancel for any reason and still receive some level of reimbursement (usually up to 75%).
Under a basic insurance plan, there are significant limits as to what expenses can be reimbursed. When you add CFAR to your insurance plan, you may be reimbursed, depending on the policy, for a wider range of travel-related expenses, like:
- Transportation
- Hotel deposits
- Vacation rental stay
- Car rental
- Event tickets
- Other travel expenses
Beyond the money-saving advantages CFAR trip insurance has over basic plans, there are a few other reasons why adding this benefit is a smart move. Here are some of the top perks:
Peace of mind. Knowing you’re covered if you have to cancel lowers the stress of planning and coordinating your trips, so you can focus on getting the most out of your travels.
Flexibility. The cancellation policy under basic insurance plans doesn’t cover bad timing. With CFAR you can rest easy if the travel dates end up not working out for one of your travel companions, or if one of life’s most important moments, like your newest grandchild arriving ahead of schedule, catches you by surprise.
Safety first. As Covid cases spike in some regions of America, many would-be visitors to the U.S. are understandably apprehensive about traveling. By purchasing CFAR with your trip insurance, you’re covered if your destination state becomes a Covid hot spot or even if you decide you just don’t feel safe traveling there.
Are There Any Restrictions with CFAR?
While CFAR gives travelers many advantages, there are a few restrictions to keep in mind.
If you want the extra financial safeguard this insurance offers, you’ll need to purchase it when you purchase your original policy. Should you need to cancel your trip, you have up to 48 hours ahead of your scheduled departure to do it.
When you purchase CFAR with your plan, you’ll need to make sure all prepaid nonrefundable trip costs are insured and that this amount is added to the total trip cost.
Your reimbursement depends on the amount specified in your policy, generally about 50% to 75% of covered costs. It does not provide a 100 percent refund.
The CFAR benefit is only available for trip insurance plans; it is not an option for travel medical insurance plans. A trip medical insurance plan is recommended.
It is important to note that you cannot choose which leg of the journey you want to insure. You must acquire CFAR insurance coverage for the full cost of all non-refundable prepaid trip arrangements.
For U.S. citizens and residents traveling within the country or overseas, the right travel insurance policy will help you pay for medical care during your trip and protect you against financial losses resulting from canceled or interrupted travel plans.
It’s important to know that all travel insurance plans are not created equal. There’s no one-size-fits-all plan or policy. There are many travel insurance providers offering so many different plans. It can be a daunting task to find the best travel insurance for your needs.
You’ll want to ask about your specific policy as some plans may exclude travel cancellation due to circumstances like pre-existing conditions, pandemics, death of a pet, war, and more.
How much does CFAR cost?
CFAR coverage adds 40% to the cost of your base travel insurance price and travel insurance typically costs between 5%-10% of your total trip cost. Let’s say your total trip cost is $5,000 and the price of your base travel policy is $500, (10% of trip cost), you might pay $200 to add CFAR insurance to your plan. In this case, the total cost to insure your trip with the CFAR add-on would be $700.
CFAR insurance may cost more than standard travel insurance policies but it gives you the flexibility of being able to cancel your trip plans for literally any reason. We’re slowly moving past the pandemic but people are still understandably apprehensive about travel. A lot of travelers these days are booking flights far in advance and CFAR can help them navigate the unexpected.
Is CFAR insurance worth it?
Knowing that any circumstances are covered under CFAR the added cost can be worth it. A cancellation policy fills in the coverage gaps of a basic travel insurance policy.
Although some people only rely on similar coverage that travel credit cards claim to provide, that coverage can often come with a long list of exclusions. Please note that not all cards may provide such protections. Be sure to check with your bank / credit card company to know exactly what is covered and what isn’t.
Is CFAR insurance absolutely needed?
As travel regulations continue to evolve, post-pandemic, travelers are having to face the reality that all travel is uncertain right now. Due to changing restrictions, trips and vacations are more likely to be canceled or rescheduled. To be as covered as possible, travelers should consider purchasing Cancel For Any Reason (CFAR) coverage. It can help recoup the costs that come with canceling your trip when unforeseen circumstances arise such as:
- Your trip is expensive.
- Your trip involves multiple destinations.
- You’re less than 100% certain you’ll be able to go.
- You’re nervous about what might be happening in your destination country by the time the departure date comes around.
- COVID-19 in your destination country might require quarantine.
- Travel bans to and from your country of origin or your destination are more likely.
In these cases and more, spending a little extra for CFAR is a bargain considering that with only a standard travel insurance policy, you could lose thousands of dollars if you have to cancel your trip due to a non-covered reason. Whether to buy CFAR or not is up to you. The main thing is that you have coverage that satisfies your most important needs so that you stay safe physically and financially during your trip.
How to Pick the Right CFAR Travel Insurance Plan?
Determine Eligibility
Some insurance policies are limited to certain states in the U.S. and residential status. For example, the CFAR add-on for the Travel Safe Classic plan is not available to residents of New York.
Review Credit ratings
Look at the Credit Rating provided by agencies such as AM Best, Fitch, and Standard & Poor’s. The rating is given on the assessment of overall financial strength that is the insurer’s ability to meet policyholder obligations. Make sure your base insurance plan has a good rating.
A score of A (excellent) by renowned credit rating agencies such as AM Best is considered a gold standard. All the policies listed on VisitorsCoverage are rated A (excellent).
Assess basic travel insurance coverage
Since CFAR is a supplementary coverage, evaluate the basic coverages of your base plan. For instance, if your base plan covers trip interruption, plans such as Worldwide Trip Protector by Travel Insured and Safe Travels Voyager by Trawick International, offer up to 150% of the trip cost for trip interruption.
Understand the claim process
Look for policies with a straightforward claim process and good customer support. Speak to our Customer Success Team to understand which policy will match your requirements.
Our Top 3 CFAR Insurance Plans
To help you determine which Cancel For Any Reason plan is right for you, we created this visual for a side-by-side review of some of our best CFAR insurance plans for U.S. residents.
Safe Travel Voyager by Trawick International
The Safe Travels Voyager plan is designed for those in search of the highest available benefit limits to protect their trip.
Highlights of Safe Travels Voyager Plan:
- Comprehensive Coverage
- Only available to U.S. citizens and U.S. Residents
- Includes Primary Medical Coverage up to $250,000 per person
- Covers trip costs up to $100,000 per person
Provides coverage for Pre-Existing Medical conditions on plans purchased prior to or with final trip payment
- Trip Cancellation: 100% of Trip Cost
- Trip Interruption: 150% of Trip Cost
Include trip delay of $2,000 for potential accommodations/lodging expenses
COVID-19 Medical Expenses are covered and treated the same as any other sickness
- Baggage Delay $600 (8 hours or more)
- Baggage and Personal Effects $2,500
- 24 Hour AD&D $25,000
The CFAR option covers 75% of the prepaid, non-refundable, forfeited payments paid for your trip if your trip gets canceled for any reason not otherwise covered by the policy. A generous 21 days is available to add the CFAR coverage after your initial trip deposit.
Worldwide Trip Protector Plus by C&F Travel Insured
The Worldwide Trip Protector Plus has the most comprehensive list of covered reasons for canceling or interrupting your trip, including work-related reasons, bankruptcy, unfavorable weather, etc. The maximum trip duration under the plan is 180 days.
