Essential information about 'cancel for any reason' travel coverage

When planning your travels, have you ever thought about the various situations that could disrupt your journey — such as illness, work commitments, or even a broken leg? After weighing the potential "what-ifs," many travelers choose to invest in travel insurance, but often miss the option for "cancel for any reason" add-ons (often referred to as CFAR).

While it’s easy to remain hopeful, unexpected events can and do happen, and they might not always be included in your standard travel insurance policy.

Considering whether to invest in this extra layer of protection? If you’re unclear about what "cancel for any reason" travel coverage entails and when it’s advisable to buy it, here’s all you need to know.

Key insights about travel insurance

"Cancel for any reason," often referred to as CFAR, is an optional, time-sensitive benefit that can be added to certain comprehensive travel insurance plans. Before we explore the specifics, it’s important to have a basic understanding of trip insurance as a whole.

Here are some resources that provide comprehensive information about travel insurance and its advantages, covering everything from trip cancellation and interruption to emergency medical care and baggage delay coverage:

• The top travel insurance plans and providers
• Do you need travel insurance if your credit card offers protection?
  
• Best credit cards that include travel insurance
• The best cards for trip cancellation and interruption coverage — including what they actually protect
  
• Which credit cards cover delays in baggage?

What does 'cancel for any reason' protection mean?

While travel insurance policies can cover a variety of situations (such as medical evacuations, trip cancellations due to terrorism, or rental car damage), not every scenario is included in every policy.

For instance, some trip insurance plans may provide coverage for job layoffs, while others may not. Some policies feature extensive emergency medical coverage, whereas others might fall short. This is why it's crucial to choose a plan that aligns with your specific needs for each trip.

When it comes to travel insurance, you’ll often find a lengthy list of exclusions: routine pregnancy, pet illness, death by suicide (yours or that of a traveling companion), self-inflicted injuries, mental health disorders, activities like mountain climbing, bungee jumping, skydiving, as well as declared or undeclared wars, and epidemics and pandemics.

If you're concerned about the possibility of a new pandemic or epidemic arising, a typical travel insurance policy may not reimburse you for canceling your trip out of that concern. This is where CFAR becomes relevant.

CFAR is a time-sensitive add-on available from certain providers when you purchase specific comprehensive travel insurance plans, provided you meet certain eligibility criteria. By opting for this additional coverage, you gain the flexibility to cancel for any reason as long as you adhere to the policy’s purchasing and cancellation guidelines.

When can I add CFAR protection?

Generally, you can only add CFAR protection to a comprehensive travel insurance policy at the moment of purchase — you usually can't buy the policy and later decide to include the CFAR option.

Moreover, you must commit to both the policy and the CFAR protection shortly after making your initial trip payment. According to InsureMyTrip, typically, "the policy must be acquired within 10-21 days of making the initial trip payment to qualify for CFAR benefits."

Many providers will require you to insure the full value of your trip, and there may be additional stipulations. As always, it's essential to thoroughly review all terms before acquiring any travel insurance policy, including CFAR coverage.

What is the cost of CFAR coverage?

CFAR coverage can be an effective way to safeguard against the unpredictable uncertainties that may arise before your trip. The cost for this add-on is typically determined as a percentage of the base price of the travel insurance policy you choose.

Standard comprehensive plans generally range from about 4% to 10% of the total trip cost, while adding CFAR coverage may increase the cost by 40% to 60% on top of the base plan (not based on the trip cost itself).

Here’s a hypothetical example for a $5,000 trip for two 50-year-old travelers heading to Aruba:

• A standard comprehensive plan could cost around $250 — representing 5% of the total trip cost.
• A comprehensive plan that includes the CFAR option might be priced around $375 — this combines the standard plan cost ($250) plus an additional 50% ($125).

However, keep in mind that the costs of all plans will vary based on individual quote specifics.

Will you receive a full refund if you opt for CFAR coverage?

No, not typically. Generally, CFAR coverage can reimburse you for up to 75% of your total insured, prepaid, and nonrefundable trip expenses. Additionally, CFAR coverage usually mandates that you cancel your trip at least two days before your departure to qualify for reimbursement.

Carefully review the terms of the insurance policy to determine how much you would be refunded if you utilize the CFAR provisions and cancel your insured trip — and make sure you're aware of the cancellation deadline.

Is purchasing CFAR coverage advisable?

Deciding whether to travel and what type of insurance to purchase — or not — is always a personal choice. However, TPG has received numerous inquiries from readers on this subject over the past few years.

"One of the most common questions travelers ask is when it’s worth it to invest in the CFAR upgrade," says Meghan Walch, a travel insurance specialist and product director at InsureMyTrip. "It’s crucial to understand that a standard comprehensive policy does not cover travel-related anxiety. That’s why we highly encourage travelers to consider CFAR, if they qualify."

If your overall trip cost is low, you might opt out of insurance — or the added CFAR coverage — and choose to "self-insure" (meaning you'll absorb the nonrefundable costs if you cancel). However, if your trip is costly, the additional expense for CFAR coverage may seem like a worthwhile investment — it’s far better than risking thousands of dollars by canceling nonrefundable bookings.

A few additional tips

Before the COVID-19 outbreak in 2020, many individuals had never considered that a pandemic could disrupt their travel plans. While we’ve moved past lockdowns, the pandemic introduced new complexities into the decision-making process for future vacations. Here are some scenarios to keep in mind:

What should you do if you're about to book a trip but feel uncertain due to potential pandemic risks?

If you’re hesitant to invest a significant sum in a future trip, obtaining a comprehensive travel insurance policy and adding CFAR coverage might be your best option.

"Cancel for any reason is the only way to safeguard most of your trip expenses if you want the option to cancel your plans," explains Walch.

This could also be an excellent choice for travelers with compromised immune systems. Even if a doctor confirms your inability to travel, that may not suffice for reimbursement under a standard comprehensive plan — but CFAR coverage could help recover some of your lost costs.

If you're looking for CFAR coverage, you can visit a site like InsureMyTrip and select the appropriate checkbox in the search results:

This will filter the results to display only policies that offer that specific coverage.

What should you do if you booked a trip and have insurance, but your policy lacks a CFAR clause?

If you obtained a comprehensive travel insurance plan for your upcoming trip but didn’t include CFAR coverage, be aware that your options will be more restricted. While CFAR protection may cover pandemic-related issues, other comprehensive policies might address different medical-related concerns.

These may consist of:

• Coverage for typical concerns, such as cancellations due to a diagnosed illness prior to travel
• Emergency medical services from a doctor or hospital if you fall ill while away
• Accommodation coverage if you are quarantined at your travel destination

Always examine your policy closely to grasp the exclusions — but keep in mind that, without CFAR coverage, canceling a trip simply due to fear of a new outbreak will likely not lead to a successful claim under standard comprehensive travel insurance policies.

What should you do if you’ve booked a trip and lack travel insurance?

First, check when you actually made the booking. If it was within the past three weeks, you might still qualify for a comprehensive travel insurance plan that includes the CFAR add-on.

If not, there may still be comprehensive travel insurance policies that offer extra protection for illness-related issues — including emergency medical evacuation.

In summary, it’s essential to explore your travel insurance options as soon as you book (and make an initial payment for) a trip. This approach will increase the number of available plans and is especially important for time-sensitive benefits — like CFAR coverage.

Top credit cards for trip cancellation and interruption insurance

Credit cards typically don’t provide CFAR travel insurance. However, many offer a variety of other travel insurance options that could adequately cover your needs, serving as an additional layer of protection alongside any separate policies you may purchase.

If you’re specifically seeking CFAR travel insurance, we recommend obtaining an independent policy. Nevertheless, here are some cards we suggest that provide a range of other travel insurance coverage.

• Chase Sapphire Reserve®: Ideal for travelers seeking extensive travel protections
• Chase Sapphire Preferred® Card: Perfect for those wanting a card with an annual fee under $100
• Capital One Venture X Rewards Credit Card: Best suited for Capital One enthusiasts
• United Club℠ Infinite Card: Great for loyal United Airlines travelers
• IHG One Rewards Premier Credit Card: Tailored for IHG fans
• World of Hyatt Credit Card: Designed for Hyatt aficionados
• Ink Business Preferred® Credit Card: Best for business travelers
• The Platinum Card® from American Express: Optimal for traveling with companions who aren't family

In conclusion

Having the reassurance that travel insurance offers is crucial, and while we hope you never need it, it can be invaluable if your plans go sideways. You might have previously dismissed the notion of trip insurance (particularly costly policies with a CFAR add-on), but if you're looking to safeguard against uncertainties on an expensive trip, CFAR could be a wise choice to consider.

Disclaimer: This information is provided by IMT Services, LLC (InsureMyTrip.com), a licensed insurance producer (NPN: 5119217) and a part of the Tokio Marine HCC group. IMT's services are available only in states where it holds a license, and products through InsureMyTrip.com may not be accessible in all states. All insurance products are subject to the terms in the relevant insurance policy, and all associated decisions (like coverage approvals, premiums, commissions, and fees) are the sole responsibility of the underwriting insurer. This site’s information does not alter or modify any insurance policy terms. For further details, visit insuremytrip.com.

For the Capital One products mentioned on this page, some benefits may be provided by Visa® or Mastercard® and can vary by product. Please refer to the respective Guide to Benefits for specifics, as terms and exclusions apply.