When making travel plans, do you ever stop to think about all the events that could derail your trip, like an illness, a conflict at the destination, or maybe even a broken leg? After considering the “what ifs,” many people decide to purchase travel insurance, but travelers often overlook the “cancel for any reason” add-on (sometimes called CFAR).
As much as we like to be eternally optimistic, unlikely scenarios can and do occur, and may not always be covered by your standard travel insurance policy.
And in the current tumultuous international climate, where travel has already been disrupted in the Caribbean, Mexico and the Middle East This year, having a CFAR policy can make all the difference in recovering your investment.
Wondering if you should opt for the extra protection? If you’re not sure what “cancel for any reason” travel protection is and when you should purchase it, here’s everything you need to know.
What you need to know about travel insurance
CFAR protection is an optional expedited benefit that can be added to some comprehensive travel insurance policies. Before delving into the details, it’s helpful to understand travel insurance in general.
Here are some resources that explain everything you need to know about travel insurance and its benefits, from trip cancellation and interruption coverage to medical emergency and baggage delay coverage:
What is “cancel for any reason” protection?
While travel insurance policies may offer a variety of inclusions (such as medical evacuation, trip cancellation due to domestic or foreign terrorism, or protection in case of damage to your rental car), not all eventualities are included in all insurance policies.
For example, some travel insurance plans may offer coverage for job layoffs, while others may not. Some policies may have solid emergency medical coverage, while the competition does not. That’s why it’s important to select a plan that meets your specific needs for each trip.
When it comes to travel insurance, it is common to see a long list of incidents excluded from coverage: common circumstances such as pregnancy, illness of a pet, death by suicide (yours or a travel companion) or any self-inflicted injury, psychological disorders, mountaineering, bungee jumping and skydiving.
Other exclusions may include declared (or undeclared) war, civil unrest, epidemics and pandemics.
If you are concerned about possible military action at your destination or a new type of pandemic or epidemic, a standard travel insurance policy may not cover a trip you cancel because of that fear. This is where CFAR comes into play.
CFAR is an urgent add-on that you can purchase from some providers when purchasing specific comprehensive travel insurance plans, as long as you meet certain eligibility requirements. By paying extra for this coverage, you can cancel for any reason under the sun, as long as you follow the policy’s purchase and cancellation terms.
When am I eligible to add CFAR protection?
Generally, you are only eligible to add CFAR protection to a comprehensive travel insurance policy at the time of purchase; You generally can’t buy the policy and then decide to commit to the CFAR add-on.
Additionally, you will need to commit to the policy. and CFAR protection shortly after making the initial trip payment. According to the travel insurance aggregator InsureMyTripGenerally, “a policy must be purchased within 10 to 21 days of making the initial trip payment to be eligible for CFAR benefits.”
Many providers will require you to insure the full value of your trip and additional requirements may apply. As always, it is essential to read all terms before purchasing any travel insurance policy, including CFAR coverage.
How much does CFAR coverage cost?
CFAR coverage can be a good way to protect your bets against unknown uncertainties that may arise before you travel. The rate for this add-on is typically calculated as a percentage of the price of the standard insurance policy you select.
Standard comprehensive plans can cost 4% to 10% of the total cost of the insured trip, and CFAR coverage can cost 40% to 60% more than the standard plan (not the cost of the trip).
Consider the following illustrative example of a $5,000 trip with two 50-year-old travelers to Aruba:
- A standard full plan can cost around $250, which is 5% of the total trip cost.
- A comprehensive plan with the CFAR update included can cost around $375, which is the price of the standard plan ($250) plus an additional 50% ($125).
However, please note that all plan costs will differ depending on the details of the individual quote.
Will you get all your money back if you buy CFAR coverage?
No. Generally speaking, CFAR coverage can reimburse up to 75% of the total cost of your insured, prepaid, non-refundable trip. Additionally, CFAR coverage generally requires that you cancel your trip at least two days before departure to be eligible for reimbursement.
Check the terms of your insurance policy carefully to find out how much your refund would be if you invoked the CFAR terms and canceled your insured trip, and make sure you know the deadline for doing so.
Should you buy CFAR coverage?
Whether you decide to travel and what level of insurance to purchase (or not) is always a personal decision. However, TPG has consistently received a large number of reader questions about this topic over the past few years.
“One of the top questions travelers ask is when to spend money on the CFAR upgrade,” says Meghan Walch, travel insurance expert and product manager at InsureMyTrip. “It is important to note that a standard comprehensive policy does not No cover the fear of traveling. “That’s why we strongly encourage all travelers to consider CFAR, if they are eligible.”
If the total cost of your trip is low, you may decide to forego insurance (or additional CFAR coverage) and instead “self-insure” (that is, assume the non-refundable costs of the trip if you cancel). However, if your vacation is expensive, the additional fee for CFAR coverage may seem like a bargain. It’s better than the alternative of potentially losing thousands of dollars if you have to cancel non-refundable reservations.
A few more tips
Many people had never considered the possibility of a pandemic altering their travel plans before the COVID-19 outbreak in 2020. Similarly, most travelers had not imagined facing closed airports due to armed conflicts in Latin America and the Middle East. These concerns add a new layer of complexity to decisions about booking future vacations.
Here are some specific scenarios to consider:
What to do if you’re about to book a trip but have doubts for fear of a future pandemic or war
If you are afraid of committing a large amount of money to a future trip, purchase a comprehensive travel insurance policy. and Adding the CFAR coverage option might be the best option.
“Cancelling for any reason is the only way to protect the majority of your trip cost if you want the flexibility to cancel your trip,” Walch says.
For example, this could also be a great option for immunocompromised travelers. Even if a doctor attests to your inability to travel, it may not be enough to qualify for reimbursement under a standard comprehensive plan, but CFAR coverage could help you recover some of your lost costs.
Or, if you are planning a trip to an area that borders a currently conflicted destination where tourism is still operating but are unsure if that will change in the future, CFAR coverage would allow you to change your plans without giving up all of the costs already committed.
What to do if you booked a trip and have insurance, but your policy does not include a CFAR clause
If you purchased a comprehensive travel insurance plan for an upcoming trip but didn’t add CFAR coverage, keep in mind that your options are more limited. While CFAR protection can cover you for pandemic-related risks, other comprehensive policies can cover other health-related concerns.
These may include:
- Coverage for common concerns, such as cancellation due to diagnosed illness, before traveling.
- Emergency medical care from a doctor or hospital if you get sick while traveling
- Accommodation coverage if you are quarantined at your destination
Always review your policy carefully to understand exclusions, but keep in mind that without CFAR coverage, canceling a trip simply because you are afraid of a new outbreak will likely not result in a successful claim under standard comprehensive travel insurance plans.
What to do if you booked a trip and don’t have travel insurance
First, look at when you actually booked the trip. If it was within the last three weeks, you may still be eligible for a comprehensive travel insurance plan with the CFAR add-on.
Otherwise, there may still be comprehensive travel insurance policies that provide additional protection, including emergency medical evacuation.
In short, it’s essential to research your travel insurance options as soon as you book a trip (and make a down payment). This will maximize the number of applicable plans and is particularly important with respect to urgent benefits such as CFAR protection.
Do credit cards offer CFAR travel insurance?
Credit cards generally do not offer CFAR travel insurance. However, many come with a variety of other travel insurance policies that can cover your needs and act as an extra layer of security on top of any additional policies you may take out.
If you are specifically looking for CFAR travel insurance, we recommend purchasing a separate policy. That said, some cards offer a variety of additional travel insurance, including trip cancellation and interruption coverage.
In a nutshell
Having the peace of mind that travel insurance provides is important, and while we hope you never have to use it, it could prove invaluable if plans go awry. You may have previously ignored the idea of travel insurance, especially expensive policies that offer a CFAR add-on. But if you want to be covered for the uncertainties of an expensive trip, CFAR can be a great option.
Disclaimer: This information is provided by IMT Services, LLC (AseguraMiTriaje.com), a licensed insurance producer (NPN: 5119217) and member of the Tokio Marine HCC group of companies. IMT services are only available in states where it is licensed to do business and products provided through AseguraMiTriaje.com May not be available in all states. All insurance products are governed by the terms of the applicable insurance policy, and all related decisions (such as approval of coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the insurer. The information contained on this site does not create or modify the terms of any insurance policy in any way. For more information, visit insurancemytrip.com.
