You can’t plan when an emergency is going to happen. Whether you take one vacation a year, or travel on a regular basis for your business, a good travel insurance plan will cover you for virtually every unexpected contingency. From travel delays due to bad weather or a missed connection, a lost piece of luggage, or a medical emergency in a foreign country, help is only a phone call away.
Travel insurance can seem like a confusing and complicated topic.
Trip Cancellation vs. Cancel For Any Reason
There are two different benefits that will cover you to cancel your trip: Trip Cancellation and Cancel for Any Reason.
The first and most commonly used is Trip Cancellation. Included in every comprehensive policy, Trip Cancellation covers you for specific unforeseen covered reasons that cause you to cancel your trip. The most common reasons for cancellation include:
- becoming unexpectedly ill or injured and being rendered unfit to travel (by order of a licensed physician)
- hospitalization or death of a non-traveling family member
- various weather or common carrier related issues (varies by policy)
- unforeseen natural disasters at home or the destination
- legal obligation, such as being called for jury duty or to appear as a witness in court
- work related reasons (varies heavily by policy, usually only for layoff/termination)
With Trip Cancellation, you are covered to cancel up until departure. Should you cancel, you will be reimbursed 100% of the prepaid and non-refundable trip cost for which you are insured and can provide documentation. Really its only weakness is that it covers for specific reasons.
Cancel For Any Reason
Cancel for Any Reason (CFAR) is an optional benefit available on only a few different policies, usually for an additional charge. Unlike Trip Cancellation, Cancel for Any Reason have few eligibility criteria:
- It is only available within 10-30 days of your initial trip payment (depending on the policy).
- You MUST insure 100% of your pre-paid and non-refundable trip cost. This is very important, you must insure to the dollar or higher.
- Cancellation of your travel arrangements and notification of the insurance company must occur more than 2 days before your scheduled departure date.
- You will not be reimbursed 100% of your trip cost. Cancel for any reason returns between 50%-80% depending on the policy.
The advantage here is that it doesn’t matter why you have to cancel your trip. Some common reasons for buying CFAR include the following (all of which would never be covered with trip cancellation):
- political or civil unrest
- declining health/death of a friend or pet (as opposed to a family member)
These are just examples though. Regardless of why you might need to cancel a trip, Cancel for Any Reason will cover it.
TODAY Travel Editor, Peter Greenberg, recommends purchasing travel insurance to protect your financial investment and your peace of mind. In a recently published article, Greenberg lists ten reasons why travel insurance is a must-have accessory.
- Your flight has been cancelled.
- Your bags are lost and your medication is in it. You need to have an emergency prescription filled.
- Your passport and wallet are stolen, and you need emergency cash and a replacement passport.
- You’re involved in an accident and adequate medical treatment is not available. You need medical evacuation.
- You need to cancel your trip due to illness.
- Your cruise line, airline or tour operator goes bankrupt. You need your non-refundable expenses covered and to get to your destination.
- You have a medical emergency in a foreign country.
- A terrorist incident occurs in the city where you’re planning to visit and you want to cancel your trip.
- A hurricane forces you to evacuate your resort, hotel or cruise.
- In response to our sluggish and sometimes uncertain economy, we’ve added a 10th reason – You lose your job but you’ve already paid for your trip or cruise and need your cash back.