Preparing for a trip now can be quite a hassle as the travel industry continues to struggle with the COVID-19 pandemic. If your travel provider cancels your trip, you could run out of money.
So Money expert Clark Howard wants you to consider adding special coverage to your travel insurance to protect your wallet.
In this article, I will tell you everything you need to know about CFAR (Cancel for Any Reason) protection, which can be purchased as a supplement to travel insurance.
Why you should cancel coverage for any reason
As you may know, Clark recommends that you get it travel insurance if your trip meets one of the following criteria:
- It’s a cruise.
- Your trip is non-refundable.
- It requires you to pay thousands of dollars upfront.
- It includes a special tour as part of the trip.
Travel insurance covers many situations and scenarios, but policies don’t cover everything.
To ensure your travel insurance covers all of your needs, Clark recommends that you consider getting CFAR coverage, even if it will add a bit to the cost of your policy.
I recently won some prizes 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 insurance that costs a little more and has the added option to cancel for any reason,” says Clark.
What is Cancellation for Any Reason?
Cancel for any reason coverage is typically an add-on to your basic travel insurance. As the name suggests, CFAR coverage allows you to cancel your trip for any reason not otherwise specified in your policy.
CFAR coverage usually only offers a partial refund of your prepaid trip, but the point is that if your travel provider cancels or you are unable to travel for any reason, you won’t be left empty-handed.
“You only get 50%, 60% or 75% of your money,” Clark adds, “but you can wake up and decide you don’t want to go on a trip. You lose 25-50% knowing you have the other half of the money. There are so many ‘unexpected’ ones.”
Before you buy
Before you buy CFAR coverage, research your hotel and airline to see if they have cancellation policies that allow you to change plans without penalty.
You can usually find cancellation instructions in two places:
- on your itinerary
- On the travel provider’s website
can’t you find it Contact a customer service representative from your travel supplier(s) and get their cancellation policy explained to you.
In some cases, depending on the length of the cancellation window, you may not need CFAR.
When to buy
Unless you are traveling at the last minute, you should purchase travel insurance along with CFAR within two weeks of booking your trip.
This gives you enough lead time to find and compare the best policies.
Buy from whom
Although they offer it, you should never buy CFAR coverage from an airline, hotel or car rental website. For CFAR coverage, Clark would like you to use an independent website that is separate from your travel bookings.
“They want to buy from a third party InsureMyTrip.com,” he says.
InsureMyTrip is a website where you can compare different types of travel insurance to get the best price.
Keep in mind that you may not need CFAR insurance if your cancellation policy is reasonable. For this reason, it is important to check with your travel supplier(s) about their policies in the event of a trip cancellation or disruption.