So money expert Clark Howard wants you to think about adding specific coverage to your travel insurance to protect your wallet.
In this article, I’ll tell you everything you need to know about Cancel for Any Reason (CFAR) coverage, which can be bought as a supplement to a travel insurance policy.
Why You Should Consider Cancel for Any Reason Coverage
As you may know, Clark recommends that you get travel insurance if your trip matches one of the following criteria:
- It's a cruise.
- Your trip is non-refundable.
- It requires you to pay thousands of dollars in advance.
- It includes a special tour as part of the trip.
Travel insurance covers a lot of situations and scenarios, but the policies don’t cover everything.
To make sure your travel insurance covers all your needs, Clark recommends that you consider buying CFAR coverage even though it will increase the cost of your policy a bit.
I recently priced some travel insurance at Costco for a seven-day international trip. The base price was $71.80. CFAR coverage was available as an upgrade for $28.78 more.
“You want to buy insurance that costs a little more that has the additional option of Cancel for Any Reason coverage,” Clark says.
What Is Cancel For Any Reason Coverage?
Cancel for Any Reason coverage is typically an add-on to your base travel insurance policy. As its name implies, CFAR coverage allows you to cancel your trip for any reason that is not otherwise listed in your policy.
CFAR coverage typically provides only partial reimbursement of your prepaid travel, but the point is that you won’t be left empty-handed if your trip provider cancels or you’re not able to make the trip for some reason.
“You only get 50, 60 or 75% of your money,” Clark adds, “but you can wake up and decide that you don’t want to go on a trip. You’ll lose 25-50% but you’ll know you’ve got the other half of the money. There are so many ‘unexpecteds.’”
Before You Buy
Before you buy CFAR coverage, do your research on your hotel and airline to see if they have cancellation policies that allow you to change plans without a penalty.
A cancellation policy can usually be found one of two places:
- On your itinerary
- On the trip provider's website
Can’t find it? Contact a customer service representative from your trip provider(s) and have them explain their cancellation policy to you.
In some cases, depending on the length of the cancellation window, you might not need CFAR.
When To Buy
If you’re not traveling at the last minute, you should buy trip insurance along with CFAR within two weeks of when you book your trip.
That gives you plenty of lead time to shop for the best policies and compare them.
Who To Buy From
Although they may offer it, you should never buy CFAR coverage from an airline, hotel or car rental website. For CFAR coverage, Clark wants you to use an independent site that is separate from your travel bookings.
"You want to buy from a third party like InsureMyTrip.com," he says.
InsureMyTrip is a site that lets you compare different types of travel insurance to get the best price.
Remember, you may not need to get CFAR coverage if your cancellation policy is adequate. That’s why it’s important to check with your travel provider(s) to learn about the policies is in case of trip cancellation or interruption.
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