Cancel for Any Reason is an Important Trip Insurance Option
Feb 12, 2019
In the last several years, travelers have seen a variety of events that have affected their ability and desire to travel. Some of these events have prompted a complete shutdown of vacation spots (the hurricane season of 2017 and the Caribbean), and others have made travel risky for certain travelers (Zika and pregnant women).
Examples of other concerning events include terrorist activities, varying kinds of weather events, strikes, and government shutdowns.
Needless to say, these types of events can wreak havoc on a traveler’s plans. As the number and type of such events have increased, many travelers have begun asking how they can protect themselves and their wallets for similar unpredictable and worrisome events.
One solution the travel insurance industry offers is trip insurance, and one key benefit offered on many trip insurance plans is growing in popularity. It’s Cancel for Any Reason, also known as CFAR.
Trip Insurance Coverage
A good trip insurance plan in its most basic sense includes protection for:
Your unused and nonrefundable trip costs (hotel and airfare expenses that will not be refunded if you must cancel your trip).
Medical expenses that could occur if you get sick or hurt on your trip.
Baggage and personal belongings that could be lost, stolen or damaged during travel.
A trip insurance plan is helpful if must cancel your trip or if your trip is interrupted or delayed. But to take any of these actions, you must meet the triggers listed in the plan. Triggers vary from company to company, plan to plan, and even benefit to benefit.
Common trip insurance triggers
The most common triggers include the death, sickness, and injury of you, your family member, and your traveling companion. There are typically many more triggers as well. They include things like inclement weather, strike, and bankruptcy of your airline, cruise line, or tour operator.
These trip insurance triggers represent common issues that could prevent you from traveling, but they don’t cover every possible reason you might need to cancel your trip. Also, the triggers have qualifiers.
For example, the inclement weather trigger might be stated this way: “Inclement weather that causes complete cessation of services for at least 48 consecutive hours of the common carrier on which you are scheduled to travel.”
So, if the cessation of services only lasts for 24 hours, and you decide you want to forget about your trip and go home, there is no coverage for cancelling your trip. Cancel for Any Reason can help in this type of situation.
When Cancel for Any Reason Can Help
If you’re concerned an unusual event could make you need or want to cancel your trip, you may be out of luck with regard to the standard triggers. But, Cancel for Any Reason (CFAR) can help. You won’t have to meet the requirement of a specific trip cancellation trigger; you can instead cancel for any reason you need to.
For example,when I traveled to Ireland three years ago, I bought Cancel for any Reason because I had an elderly dog who was in poor health. I knew if she became sick right before my trip, I wouldn’t want to go. CFAR solved my problem.
What is Cancel for any Reason?
It’s an optional benefit offered on many (not all) trip insurance plans that allows you to cancel your trip for any reason not otherwise covered.
If you choose CFAR, you will pay an increased amount for your insurance. Most Cancel for Any Reason benefits can bump the cost of your trip insurance plan up by 40 or 50 percent. Why? Because you’re now buying a plan with much wider coverage for trip cancellation.
Instead of being limited to cancelling your trip for a specified number and list of triggers, you can now cancel for any reason you want. If your mom’s best friend’s uncle’s cousin became ill, you could cancel your trip. If you no longer wish to be in the same room with your traveling companion, let alone the same hotel room, you can cancel.
If you consider the insurance company’s position it helps explain the increased price. The insurer knows, based on data, the likelihood of specific triggers occurring. So, they have a good idea of how to charge for them. When you add the option to cancel for any reason, the insurer doesn’t know the likelihood of you cancelling, so they have to charge more.
How do I buy Cancel for Any Reason?
You must select it when you buy your trip insurance plan.Unfortunately, it’s not available in all states. For example, if you are a Florida resident, CFAR is not available through our RoundTrip Elite plan. The availability of the CFAR benefit depends on each state’s Department of Insurance, which regulates the pricing and availability of all trip insurance benefits.
When you use our quick quote, the benefit will be offered to you if it’s available in your state.
Remember, you have to pay an additional amount for CFAR.
Are you interested in buying a trip insurance plan with CFAR?
Get a quote! →
How does Cancel for Any Reason Work?
The most important thing about CFAR is understanding how it works. If you buy the benefit and don’t use it correctly, you will not be able to make a covered claim.
Specified Time Limit
First, you must buy Cancel for Any Reason within the specified time limit. Our RoundTrip Elite plan allows you to buy it within 20 days of your initial trip payment. So start counting the day you make the first payment towards your trip.
If you add additional trip costs, you must insure them within 15 days of your payment for them. Additional trip costs could include excursions or specific tours you decide to take.
Let’s say you are taking a trip to an all-inclusive in Cancun in April, and you paid a $100 deposit for your trip on January 1. You must buy your trip insurance plan and select CFAR before or on January 20.
You then add two excursions to your trip on February 1. You must contact your insurance company before or on February 15 to add the cost of those excursions to the amount of the trip cost you are insuring.
Cover all Nonrefundable Trip Expenses
The Cancel for Any Reason benefit requires you to insure 100 percent of your nonrefundable trip expenses. If your hotel, airline, or excursion provider will refund you part of the money you paid for your trip if you cancel, you do not need to insure the refundable amount.
If you seek reimbursement through CFAR for trip expenses you did not insure, you will not be able to use the CFAR benefit to make a claim for any type of reimbursement.
Calculate carefully when you tell the insurance company your total trip cost.
Cancel within the Required Time Frame
All Cancel for Any Reason benefits require you to cancel your trip within a specified time frame. For RoundTrip Elite, you must cancel within two days of your scheduled departure date.
Reimbursement is Limited
It’s important to understand that if you use the CFAR benefit, you won’t receive 100 percent of your nonrefundable trip cost when you cancel. Instead, you will receive a stated percentage.
For our RoundTrip Elite plan, you will be reimbursed 75 percent of the amount you insured. Why? Because the insurance company is allowing you to cancel for absolutely any reason you want, and it’s difficult to determine the cost and risk of doing that.
All in all, Cancel for Any Reason is a useful benefit that can make a difference to travelers who want the flexibility to cancel their trip if they wish.
If you have any questions about CFAR and how it works, check with your agent or our inside sales staff.
Email email@example.com or call the numbers below.
Toll free 1-800-335-0611
About the Author
Angela Borden has been a member of the Seven Corners team since 2007. She originally joined as an underwriter, later transitioning to marketing to explore her passion for making all things insurance less confusing and more fun. (Is that possible?) When she's not working, Angela loves traveling and spending time with her family, including her two adorable dogs.
Read more of Angela’s blogs