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With the world opening up again, you may be ready to book travel—both close to home and abroad. Even if you have high confidence in traveling again, it’s always a good idea to protect your trip investment by buying travel insurance.
Trip cancellation insurance can reimburse you 100% of what you lose in prepaid, non-refundable deposits when you have to cancel a trip.
And if you want the flexibility and peace of mind of being able to cancel your trip for any reason and get reimbursement, there’s travel insurance for that, too.
The Basics of Trip Cancellation Insurance
Typical trip cancellation insurance is designed to cover the most common concerns when booking travel. Check your travel insurance policy for the acceptable reasons needed to make a trip cancellation claim. You’ll generally find a list like this:
- You, a family member or traveling companion become sick, injured or die
- You’re called for jury duty
- A hurricane or other natural disaster damages your home or your destination
- A terrorist event occurs at your destination within 30 days of your arrival date
- You’re laid off from work, required to work or relocated for work
- Your travel supplier cancels the trip or goes bankrupt
- You adopt a child
- You or a traveling companion legally separate or divorce (after your travel insurance effective date but before your trip departure date)
- Your passport or visa is stolen
- The school year is extended
That’s a pretty extensive list. Still, you may be worried other problems will crop up, especially if you’ve made large nonrefundable deposits that you would wave goodbye to.
The ABCs of a ‘Cancel for any Reason’ Upgrade
“Cancel for any reason” (CFAR) coverage is an upgrade offered on some trip cancellation travel insurance policies. The CFAR benefit provides you with the broadest cancellation coverage: It will cover any reasons not otherwise listed in the base cancellation policy.
Unlike standard trip cancellation coverage (which reimburses 100%), CFAR will typically provide reimbursement of 50% or 75% of your non-refundable deposits.
Adding a CFAR upgrade increases the price of your travel insurance policy by about 40%.
It’s important to know that standard travel insurance can be purchased at almost any time (including up to 24 hours before departure), says Scott Adamski, a spokesperson for AIG Travel. But optional “cancel for any reason” coverage must be added during an early purchase window. Check with your travel insurance agent so that you don’t miss the purchase window, which could be as short as 10 days from your initial trip deposit but is often 14 to 21 days.
Be aware that you generally have to insure the entire amount of your prepaid and non-refundable trip costs in order to be eligible to purchase “cancel for any reason” coverage.
Also, “if you use this benefit you must do so at least two days prior to your departure date,” says Megan Moncrief, a spokesperson for Squaremouth, a travel insurance comparison site. So if your trip is tomorrow and you’re canceling, CFAR benefits won’t apply.
Is ‘Cancel for any Reason’ Insurance Worth It?
Don’t forget that trip cancellation insurance without a “cancel for any reason” upgrade covers a host of problems. If your concerns are already listed as covered reasons in a standard trip cancellation policy—such as a concern about hurricanes—then a CFAR upgrade isn’t needed.
Moncrief says they recommend checking the policy wording or having a licensed travel insurance agent help you understand your policy before you spend the additional money on a “cancel for any reason” upgrade.
But many travelers buy CFAR coverage for the added protection and the flexibility to cancel for any reason. Moncrief says that examples of concerns that would be covered only with the CFAR benefit include:
- Illness, injury or death of a pet
- Fear of traveling for any reason
- A canceled event at your destination
- Becoming pregnant
- Simply not wanting to travel as planned
“The benefit of purchasing a CFAR policy is the assurance that you can be reimbursed for virtually anything that comes up preventing your drip,” she says.
On the downside, you are paying a premium for that peace of mind, and you will receive only a partial refund.
How Your Trip’s Cost Can Affect Your Decision
If you booked a relatively cheap trip, you may not have a lot to lose if you cancel it. If you could easily absorb the cost of lost deposits if you cancel for a reason not listed in your trip cancellation policy, a “cancel for any reason” upgrade probably isn’t worth it.
“However, those with larger-scale, expensive trips may be more inclined if they have a very specific concern that isn’t covered by a standard trip cancellation policy,” says Moncrief.
Ultimately, a decision to purchase “cancel for any reason” coverage is connected to your risk tolerance.
Adamski of AIG Travel says there are a number of variables to consider. For example, a Thanksgiving trip to grandma’s house—involving a $500 airplane ticket and little else—may not warrant CFAR coverage.
For a more expensive or complicated trip, CFAR might be on your radar, particularly if there are specific circumstances that pose an area of concern (such as the political climate of the destination) that may not otherwise be covered under the travel insurance plan.