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
This is the most purchased coverage. 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
- 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 standard Trip Cancellation Coverage, you are generally covered to cancel up until departure. Should you cancel, you will be reimbursed up to 100% of the prepaid and non-refundable trip cost for which you are insured and can provide documentation.
Cancel For Any Reason
Cancel for Any Reason (CFAR) is an optional benefit available on fewer policies and 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 important and 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 does not matter why you must cancel your trip.