What’s the difference between trip cancellation and cancel for any reason?

Trip cancellation is one of the most popular travel insurance coverages, and one of the most misunderstood, mainly because of all the parameters and exclusions around it.

Similarly, Cancel For Any Reason coverage (CFAR) is one of the most asked about coverage options but one of the least-purchased, because of what it costs and what it pays.

If we’ve lost you already, hopefully this will bring things back in focus: CFAR is precisely what its name implies. It’s coverage that provides reimbursement to you if you cancel your trip for any reason, from the fear of catching COVID to your kid’s baseball game.

Cancel For Any Reason coverage

CFAR will only reimburse a percentage of what you paid for your trip and that varies by travel insurance provider, so always understand the terms and conditions of your plan. Generally, it reimburses 50% to 75% of your prepaid trip costs.

And to get to that level of reimbursement, you have to pay quite a bit more in premium – sometimes as much as 50% more. 

CFAR, which is available on BHTP’s LuxuryCare® plan also comes with some restrictions:

  • You need to buy your plan within 15 days of making your initial trip deposit;
  • You insure your entire trip cost;
  • You cancel your trip 48 or more hours before your departure date;
  • The per-person trip cost is less than $10,000.

Let’s do the math on all of that.

Suppose your trip has a trip cost of $5,000, and it’s fully paid and nonrefundable. And let’s say the insurance policy with CFAR cost $500, or 10% of your insured trip.

If you cancel your trip for any reason you choose to because you purchased CFAR, you’d receive 50% of the $5,000 you paid on your trip – or $2,500. It’s still something for the opportunity to just decide you don’t want to go. Having CFAR is truly up to the insured traveler who is uncertain and contemplating the possibilities of “what if I just don’t want to go?”

This is why many people ask about CFAR and a handful actually buy the product. Only you can determine if the math adds up with your personal concerns or situations.

Trip cancellation workarounds

So given the issues with CFAR, let’s take another look at trip cancellation.

The two big fears that cause people to consider CFAR are fears of terrorism or disease epidemics. These fears can be managed without buying CFAR by carefully choosing your destinations and travel modes.

You can check global health statistics to determine places where epidemics rarely occur. And the State Department website and other resources list destinations that are largely free from the threat of terrorist attacks. These can help you zero in on an appropriate destination.

And just like your travel insurance plan with CFAR, your non-CFAR plan covers medical emergencies, lost luggage, and a wide range of circumstances that might cause you to cancel or interrupt your trip.

Other options

If none of this sounds good to you, you may want to investigate buying only fully refundable transportation and lodging options for your next trip. However, you may find your choices limited if you go that route.

What’s the best answer? If you’re truly afraid you may have to cancel your trip for a reason that’s not covered by general travel insurance, CFAR is a reasonable option. Otherwise, you may have to get creative.