cancel for any reason coverage?

We recently had the opportunity to share our thoughts on the value of “cancel for any reason” or “CFAR” coverage with the readers of Forbes Magazine.

Hope he’s got medical evacuation insurance!

We think purchasing a comprehensive travel insurance policy is a no-brainer. Emergencies can happen when you least expect them. When we book travel for our clients, we recommend that all clients purchase a travel insurance policy to protect the value of their vacation. Cruise lines, airlines, hotels and tour operators all charge high penalties for cancellation, ranging from the full deposit to no refund at all.  And, keep in mind is that that many health insurance policies will not cover you when you are out of the country.  Travel insurance can protect you in the event of Trip Cancellation, Trip Delay, Trip Interruption, Missed Connection, Baggage Loss, Theft or Damage, Baggage Delay, Emergency Medical and Dental Expenses, Emergency Medical Transportation, and more.

While we aren’t licensed insurance brokers, and we aren’t in a position to provide detailed information about the terms of coverage, we do have preferred insurance providers in our network, and are able to send our clients quotes for comprehensive insurance policies.

Coverage for cancellation is only one piece of most insurance policies. If you’re not concerned that you might need to cancel, you still might need coverage for emergency medical, or if your luggage gets stolen. We had one client who’s smartphone was stolen on his honeymoon in Spain. The cost of his travel insurance policy was much less than the cost of replacing his phone.

We rarely quote CFAR when we send insurance quotes, however. Most comprehensive insurance policies include cancellation for covered reasons. Those reasons might be things like if you get sick and can’t travel. Or if you have a death in the family. Sometimes they’ll cover you even if you have an unforseen work or school obligation. And when you submit a cancellation claim for a covered reason, most of the policies we quote to our clients will cover that at 100%, up to a limit.

“Cancel for any reason” policies, on the other hand, generally only cover 50% to 75% of the total non-refundable trip cost. And, as we said to Forbes, they add tremendously to the expense of a policy. So adding CFAR to your comprehensive third-party insurance policy is likely to be a really poor value, considering the expense and the limitations on what they’ll pay for.

If you really feel strongly that you need to be able to cancel your trip just because you’re having a bad hair day, or some other reason like that, your best option would be to purchase cancellation protection or trip protection from the supplier. Tour operators, airlines, and cruise lines frequently offer cancellation protection at a much lower cost than it would be to add it to a third-party insurance policy.

Don’t try this at home. Especially if the van is moving.

There are caveats, though.

Cancellation protection that you might get from the tour operator or cruise line is not likely to be a comprehensive insurance policy. You’re probably not getting emergency medical or medical evacuation protection, for example.

Sometimes, those policies that our suppliers offer don’t pay you back in cash for your trip — they may only give you a credit for future travel, and you might have a limited amount of time to use that credit. So, if your bad hair day turns into a bad hair year, your credits may expire before you can get to them.

We’re a full-service agency, meaning not only can we book your tours, your cruises, your hotel stays and your air tickets — we can also provide you with quotes for travel insurance and trip protection from insurance companies and supplier partners we trust. If you’re ready to take your next trip, drop us a line!