Travel is full of excitement, but plans can change unexpectedly. That’s where Cancel For Any Reason (CFAR) travel insurance comes in. This insurance allows travelers to cancel their trip for any reason and still get reimbursed for a significant portion of the cost. But before buying CFAR coverage, it’s important to know how much it costs and what factors affect the price.
In this article, we will explore what CFAR travel insurance is, how it works, and the factors that determine its cost. By the end, you’ll have a clear understanding of what to expect when budgeting for this type of travel insurance.
What Is CFAR Travel Insurance?
CFAR stands for Cancel For Any Reason. It is an optional upgrade to standard travel insurance policies that allows travelers to cancel their trip for reasons that would not usually be covered under regular travel insurance. With regular travel insurance, you can only cancel your trip for covered reasons like illness, injury, or death of a family member. CFAR, however, gives you more flexibility and allows you to cancel for any reason—whether it’s due to a change in your mood, personal circumstances, or concerns about the destination.
CFAR policies will typically reimburse you up to 50% to 75% of the non-refundable trip costs, depending on the insurer and plan.
How CFAR Travel Insurance Works
The first thing to know about CFAR is that it is an add-on to your base travel insurance policy, not a standalone plan. Here’s how it works:
Purchase a standard travel insurance policy that includes trip cancellation coverage.
Upgrade to CFAR coverage during the process (often, CFAR must be added within a certain period—usually 14 to 21 days—of booking your trip).
If you decide to cancel your trip for any reason, you must do so at least 48 to 72 hours before your scheduled departure date to receive reimbursement.
CFAR typically covers 50% to 75% of your non-refundable trip costs, which is less than the full coverage provided by traditional trip cancellation insurance. However, the benefit is that it allows cancellation for any reason, providing more flexibility.
SEE ALSO: How Much Does AAA Travel Insurance Cost?
How Much Does CFAR Travel Insurance Cost?
The cost of CFAR travel insurance is typically more expensive than standard travel insurance due to the additional flexibility it offers. CFAR coverage generally adds 40% to 60% to the base cost of a travel insurance policy. However, the total cost will depend on several factors, including the price of your trip, your age, and the coverage you select.
Let’s break down the key factors that affect the cost of CFAR travel insurance:
1. The Cost of Your Trip
One of the most significant factors in determining the cost of CFAR travel insurance is the total price of your trip. Insurance providers base their premium rates on the non-refundable portions of your travel expenses, such as flights, hotel reservations, and tours.
For example, if your trip costs $5,000 and you purchase a travel insurance policy without CFAR, the base cost might be $200 to $400. However, if you add CFAR coverage, it could increase the total insurance cost to around $280 to $640.
The higher your trip cost, the more you’ll pay for both the standard travel insurance and the CFAR add-on.
2. Your Age
Age plays a crucial role in determining the cost of travel insurance. Older travelers tend to pay higher premiums for travel insurance because they are statistically more likely to need medical attention or cancel a trip due to health issues.
For CFAR coverage, the same rule applies. Younger travelers (under 30) may find the added cost of CFAR to be on the lower end of the spectrum, while older travelers (especially those over 65) may pay significantly more.
For example, if a 25-year-old and a 65-year-old both purchase CFAR travel insurance for a $5,000 trip, the 25-year-old might pay around $250 for the base insurance and $350 with CFAR. The 65-year-old, on the other hand, could pay $500 for the base policy and $700 with CFAR.
3. Length of Trip
The duration of your trip also affects how much you’ll pay for CFAR travel insurance. Longer trips generally cost more to insure because there is a higher chance that something could go wrong, such as an illness, injury, or sudden change in plans.
For instance, a one-week trip may result in lower CFAR insurance costs than a three-week or month-long trip. If you’re traveling for a longer period, the insurer takes on more risk, which drives up the cost.
4. Destination
Your destination can also impact the cost of CFAR travel insurance. Some countries or regions are seen as higher-risk, either due to potential political instability, higher medical costs, or a greater likelihood of trip cancellations.
For example, traveling to remote or less-developed destinations may require more expensive CFAR coverage due to potential evacuation costs or medical expenses. Conversely, if you’re traveling to popular tourist destinations with stable infrastructures, the cost may be lower.
5. Time of Purchase
Most insurance providers require you to purchase CFAR within 14 to 21 days of making your initial trip deposit. If you wait too long to add CFAR coverage, you may no longer be eligible. Purchasing CFAR shortly after booking your trip may also result in lower rates.
6. Amount of Reimbursement
CFAR policies generally reimburse 50% to 75% of your non-refundable trip costs. The higher the percentage of reimbursement, the more you’ll pay for the policy. For example, if you opt for a policy that reimburses 50%, you may pay less than if you choose a plan that covers 75% of the trip cost.
7. Coverage Limits
Some CFAR policies come with coverage limits. For example, a policy may have a maximum trip cost limit that it will insure. If your trip exceeds that limit, the insurance provider may not cover the entire cost. Be sure to review the policy terms to see if your trip qualifies for full coverage.
Average CFAR Insurance Costs
To give you a clearer idea of what you might expect to pay for CFAR travel insurance, here are some average estimates based on various trip costs:
For a $2,000 trip:
- Base insurance cost: $100–$200
- With CFAR: $140–$320
For a $5,000 trip:
- Base insurance cost: $200–$400
- With CFAR: $280–$640
For a $10,000 trip:
- Base insurance cost: $400–$800
- With CFAR: $560–$1,280
Again, these are just estimates, and actual costs will vary depending on your age, the length of the trip, and the specific coverage limits.
Is CFAR Travel Insurance Worth It?
Whether CFAR travel insurance is worth the extra cost depends on your individual needs and travel plans. Here are some situations where CFAR coverage might be beneficial:
Uncertainty about your trip: If you’re not entirely sure about your travel plans or there’s a chance you may need to cancel for reasons not covered by standard insurance, CFAR can provide peace of mind.
Expensive trips: For high-cost trips, the investment in CFAR may be worthwhile to protect your financial investment in case you decide to cancel.
Health concerns or changing conditions: If you’re worried about sudden health issues, personal conflicts, or concerns about political or environmental conditions at your destination, CFAR offers extra flexibility.
However, if you’re confident that your trip will go ahead as planned and you don’t foresee needing to cancel for an uncovered reason, then standard trip cancellation insurance may be sufficient.
How to Buy CFAR Travel Insurance
Purchasing CFAR travel insurance is relatively simple. Here are the steps to follow:
Research insurance providers: Look for insurers that offer CFAR as an add-on to standard travel insurance.
Purchase within the required timeframe: Make sure to buy the policy and the CFAR add-on within 14 to 21 days of making your first trip payment or deposit.
Review the policy terms: Read the fine print to understand what percentage of your trip cost will be reimbursed and ensure the coverage meets your needs.
Cancel within the required window: Remember, you must cancel your trip at least 48 to 72 hours before departure to qualify for CFAR reimbursement.
Conclusion
CFAR travel insurance provides flexibility and peace of mind, allowing you to cancel your trip for any reason. However, this extra coverage comes at a price, often increasing the cost of your travel insurance by 40% to 60%. The total cost will depend on factors like your age, trip length, destination, and the total cost of the trip.
Before purchasing CFAR, weigh the cost against your likelihood of needing to cancel. In some cases, it’s worth the investment, especially for expensive or uncertain trips. Just make sure to purchase it early, follow the guidelines for cancellation, and review the policy details to ensure it suits your needs.
