Cancel for any reason (CFAR) is an optional benefit that you can add to some trip protection plans. Many standard trip insurance plans include a trip cancellation benefit that reimburses you for nonrefundable prepaid trip costs if you cancel your trip for a named peril that is covered by your protection plan.
If you add CFAR to your protection plan, you can get a reimbursem*nt for nonrefundable prepaid trip costs if you decide to cancel your trip for any reason, not just those listed as a covered peril in the terms of your trip cancellation benefit.
Key Takeaways
- Most comprehensive travel insurance plans include certain trip cancellation benefits.
- Cancel for any reason (CFAR) is optional coverage that you can add to a standard travel insurance policy.
- CFAR can increase the cost of your trip protection plan by 40% to 50%.
- To purchase and use the CFAR benefit, you must comply with strict limitations and exclusions.
What Does Cancel for Any Reason (CFAR) Travel Insurance Cover?
The trip cancellation benefit of most travel insurance plans will reimburse you up to 100% of nonrefundable prepaid trip costs if you cancel all or part of your trip for certain covered reasons, such as:
- Loss of employment suffered by you or a traveling companion (restrictions may apply)
- Serious illness or injury that inhibits you or a traveling companion
- Serious illness or injury experienced by one of your family members
- You enter into legal separation or divorce procedures prior to departure
- Your travel destination is uninhabitable following a natural disaster or other catastrophe
CFAR benefits vary by insurer, but these plans typically reimburse you for 50% to 75% of prepaid trip costs if you cancel your trip for a reason not listed in your travel insurance policy’s trip cancellation terms.
For example, let’s say you pay a nonrefundable deposit for a cruise, but you decide not to go on the voyage after reading negative reviews about the cruise line. Your trip cancellation benefit would not offer a reimbursem*nt, but your CFAR coverage would.
Common reasons to use the CFAR benefit can include:
- Change in itinerary
- Concern over the state of the economy
- Family problems or personal issues
- Financial hardship such as bankruptcy or reduction in salary
- Health concerns such as a viral outbreak on a cruise ship or at a travel destination
- Political unrest in your destination
- Preexisting health condition that impedes your mobility
- Safety concerns about your destination
- Work obligations
- You change your mind about traveling
CFAR has strict eligibility criteria. You must purchase CFAR coverage within a certain period, typically within 15 days of making your initial trip deposit. Your prepaid trip arrangements must be insured when you make the purchase.
Note
You must cancel your trip within the timeframe allowed by the policy, usually no later than 48 hours before your scheduled departure.
CFAR Travel Insurance Costs
Standard travel insurance policies that include trip cancellation typically cost 5% to 10% of your total trip costs on average. Adding optional CFAR will increase the cost of your trip protection plan by 40% to 50%.
We surveyed eight travel insurance companies and found that CFAR costs an average of $223. The study was based on a 28-year-old Florida resident traveling to Costa Rica for 10 days with a total trip cost of $3,500.
Bear in mind that costs can vary widely by insurer. In our study, we found premiums as low as $121 and as high as $315. Before buying a trip protection plan, shop around to compare coverages and rates.
CFAR Travel Insurance Limits and Exclusions
It’s important to understand all CFAR requirements and restrictions before you purchase the coverage. Common CFAR exclusions and limitations include:
- Availability: Some travel insurance providers do not sell CFAR coverage.
- Coverage requirement: Typically, CFAR policies require you to insure 100% of your prepaid trip costs. For instance, you cannot insure your airfare costs but exclude hotel deposits.
- Travel insurance policy requirement: You can add CFAR to a trip protection plan, but you cannot buy the coverage as a standalone policy.
- Purchase time limit: Typically, you must add CFAR coverage within 10 to 21 days of making your first trip deposit.
- Trip reimbursem*nt limits: CFAR only reimburses up to 50% to 75% of your nonrefundable prepaid trip costs.
- Trip cancellation time limit: Most CFAR policies require you to cancel your trip no later than 48 hours prior to your scheduled departure.
- No trip interruption benefit: CFAR coverage only pays when you cancel your entire trip before departure. It will not reimburse prepaid costs for mid-trip interruptions that require you to return home earlier than scheduled.
CFAR Travel Insurance vs. Trip Cancellation Insurance
Many comprehensive travel insurance plans include a trip cancellation benefit. This benefit offers up to 100% reimbursem*nt of nonrefundable prepaid costs if you cancel your trip for a covered reason. For example, you might decide to cancel your trip if a family member dies, or if your destination experiences a natural disaster.
CFAR is optional coverage, which you can add to your standard travel insurance policy for an additional cost. You can use your CFAR benefit if you decide to cancel your trip for a reason not specified in the terms of your trip cancellation coverage. For instance, if you’ve recently experienced unexpected financial difficulties and cannot afford your trip, you can cancel it and receive a 50% to 75% reimbursem*nt of prepaid costs through your CFAR coverage.
Some travel insurance companies offer multiple trip protection plans with varying levels of financial protection. Although some insurers do not provide CFAR coverage, some offer product upgrades that feature benefits equal to or better than CFAR protection.
Before buying a policy, explore the benefits, limits, and exclusions of each plan before deciding which one best fits your needs.
Should You Add CFAR to Your Travel Insurance Policy?
Travel plans can change at a moment’s notice, making CFAR a valuable benefit, particularly for high-cost trips. To understand the value of the CFAR benefit, look no further than the daily news. Events such as viral outbreaks, violence, social unrest, and natural disasters occur without warning, wreaking havoc on communities.
Although the trip cancellation benefit of most trip protection plans enables you to cancel a trip for certain clearly defined reasons, CFAR gives you the option to abandon your travel plans based on your own circ*mstances.
Can I Get CFAR Insurance After I Pay for My Trip?
Yes. Most travel insurance companies allow you to add cancel for any reason (CFAR) to your travel insurance policy within a specific timeframe, typically 10 to 21 days after you make your first trip deposit.
Is There a Time Limit on Cancel for Any Reason Travel Insurance?
To use your CFAR benefit, you must cancel within a period specified in the coverage terms. Most CFAR policies require you to cancel no less than 48 hours before your departure time, but some policies impose a 72-hour time limit.
Does Free Cancellation Mean Full Refund?
Although trip cancellation coverage reimburses you for up to 100% of your prepaid nonrefundable trip costs, CFAR only reimburses up to 50% to 75% of these costs. CFAR is an optional coverage that will increase the cost of your travel insurance policy. But it could save you thousands of dollars if you decide to cancel your trip for a reason not covered by the trip cancellation benefit.
What Is the Difference Between Trip Cancellation Insurance and Trip Insurance?
Trip cancellation is a common benefit of many comprehensive travel insurance policies. It reimburses you up to 100% of your prepaid nonrefundable trip expenses if you must cancel for a reason specifically covered by the policy, such as a death in your family.
CFAR is an optional coverage that you can add to a comprehensive travel insurance policy. This type of coverage enables you to cancel your trip for a reason not specified in your trip cancellation coverage. For instance, you might cancel a trip if the weather is bad in your travel destination. CFAR pays only a portion of your prepaid nonrefundable trip costs, usually 50% to 75%.
The Bottom Line
Travel insurance is a valuable investment when you’re heading off on an expensive vacation. Although the trip cancellation benefit of most trip protection plans enables you to recoup costs when canceling your trip for specific reasons, it doesn’t give you the option to cancel on your own terms.
CFAR coverage expands your trip protection by reimbursing you for a percentage of your trip costs if you decide to cancel for reasons not allowed by your trip cancellation coverage. However, CFAR is a pricey add-on coverage, so it’s not necessarily the best option for all travelers or all itineraries.
