What Is Cancel for Any Reason (CFAR) Insurance?

By MICHAEL EVANS Updated April 22, 2024Fact checked by BETSY PETRICK

Cancel for any reason (CFAR) is an optional benefit that you can add to some trip protection plans. Many standard trip insurance plans include a trip cancellation benefit that reimburses you for nonrefundable prepaid trip costs if you cancel your trip for a named peril that is covered by your protection plan.If you add CFAR to your protection plan, you can get a reimbursement for nonrefundable prepaid trip costs if you decide to cancel your trip for any reason, not just those listed as a covered peril in the terms of your trip cancellation benefit.KEY

TAKEAWAYSMost comprehensive travel insurance plans include certain trip cancellation benefits.Cancel for any reason (CFAR) is optional coverage that you can add to a standard travel insurance policy.CFAR can increase the cost of your trip protection plan by 40% to 50%.To purchase and use the CFAR benefit, you must comply with strict limitations and exclusions.

LIVETABLE OF CONTENTSPERSONAL FINANCE INSURANCEWhat Is Cancel for Any Reason (CFAR) Insurance?By MICHAEL EVANS Updated April 22, 2024Fact checked by BETSY PETRICKA family with a pile of luggage has a discussion.Trending VideosClose this video playerCancel for any reason (CFAR) is an optional benefit that you can add to some trip protection plans. Many standard trip insurance plans include a trip cancellation benefit that reimburses you for nonrefundable prepaid trip costs if you cancel your trip for a named peril that is covered by your protection plan.If you add CFAR to your protection plan, you can get a reimbursement for nonrefundable prepaid trip costs if you decide to cancel your trip for any reason, not just those listed as a covered peril in the terms of your trip cancellation benefit.KEY TAKEAWAYSMost comprehensive travel insurance plans include certain trip cancellation benefits.Cancel for any reason (CFAR) is optional coverage that you can add to a standard travel insurance policy.CFAR can increase the cost of your trip protection plan by 40% to 50%.To purchase and use the CFAR benefit, you must comply with strict

limitations and exclusions.What Does Cancel for Any Reason (CFAR) Travel Insurance Cover? The trip cancellation benefit of most travel insurance plans will reimburse you up to 100% of nonrefundable prepaid trip costs if you cancel all or part of your trip for certain covered reasons, such as:1Loss of employment suffered by you or a traveling companion (restrictions may apply)Serious illness or injury that inhibits you or a traveling companionSerious illness or injury experienced by one of your family membersYou enter into legal separation or divorce procedures prior to departureYour travel destination is uninhabitable following a natural disaster or other catastropheCFAR benefits vary by insurer, but these plans typically reimburse you for 50% to 75% of prepaid trip costs if you cancel your trip for a reason not listed in your travel insurance policy’s trip cancellation terms.2For example, let’s say you pay a nonrefundable deposit for a cruise, but you decide not to go on the voyage after reading negative reviews about the cruise line. Your trip cancellation benefit would not offer a reimbursement, but your CFAR coverage would.Common reasons to use the CFAR benefit can include:Change in itineraryConcern over the state of the economy3Family problems or personal issuesFinancial hardship such as bankruptcy or reduction in salaryHealth concerns such as a viral outbreak on a cruise ship or at a travel destination2Political unrest in your

destinationPreexisting health condition that impedes your mobilitySafety concerns about your destinationWork obligationsYou change your mind about travelingCFAR has strict eligibility criteria. You must purchase CFAR coverage within a certain period, typically within 15 days of making your initial trip deposit. Your prepaid trip arrangements must be insured when you make the purchase.4NoteYou must cancel your trip within the timeframe allowed by the policy, usually no later than 48 hours before your scheduled departure.CFAR Travel Insurance CostsStandard travel insurance policies that include trip cancellation typically cost 5% to 10% of your total trip costs on average. Adding optional CFAR will increase the cost of your trip protection plan by 40% to 50%.5We surveyed eight travel insurance companies and found that CFAR costs an average of $223. The study was based on a 28-year-old Florida resident traveling to Costa Rica for 10 days with a total trip cost of $3,500.Bear in mind that costs can vary widely by insurer. In our study, we found premiums as low as $121 and as high as $315. Before buying a trip protection plan, shop around to compare coverages and rates.

LIVETABLE OF CONTENTSPERSONAL FINANCE INSURANCEWhat Is Cancel for Any Reason (CFAR) Insurance?By MICHAEL EVANS Updated April 22, 2024Fact checked by BETSY PETRICKA family with a pile of luggage has a discussion.Trending VideosClose this video playerCancel for any reason (CFAR) is an optional benefit that you can add to some trip protection plans. Many standard trip insurance plans include a trip cancellation benefit that reimburses you for nonrefundable prepaid trip costs if you cancel your trip for a named peril that is covered by your protection plan.If you add CFAR to your protection plan, you can get a reimbursement for nonrefundable prepaid trip costs if you decide to cancel your trip for any reason, not just those listed as a covered peril in the terms of your trip cancellation benefit.KEY TAKEAWAYSMost comprehensive travel insurance plans include certain trip cancellation benefits.Cancel for any reason (CFAR) is optional coverage that you can add to a standard travel insurance policy.CFAR can increase the cost of your trip protection plan by 40% to 50%.To purchase and use the CFAR benefit, you must comply with strict limitations and exclusions.What Does Cancel for Any Reason (CFAR) Travel Insurance Cover? The trip cancellation benefit of most travel insurance plans will reimburse you up to 100% of nonrefundable prepaid trip costs if you cancel all or part of your trip for certain covered reasons, such as:1Loss of employment suffered by you or a traveling companion (restrictions may apply)Serious illness or injury that inhibits you or a traveling companionSerious illness or injury experienced by one of your family membersYou enter into legal separation or divorce procedures prior to departureYour travel destination is uninhabitable following a natural disaster or other catastropheCFAR benefits vary by insurer, but these plans typically reimburse you for 50% to 75% of prepaid trip costs if you cancel your trip for a reason not listed in your travel insurance policy’s trip cancellation terms.2For example, let’s say you pay a nonrefundable deposit for a cruise, but you decide not to go on the voyage after reading negative reviews about the cruise line. Your trip cancellation benefit would not offer a reimbursement, but your CFAR coverage would.Common reasons to use the CFAR benefit can include:Change in itineraryConcern over the state of the economy3Family problems or personal issuesFinancial hardship such as bankruptcy or reduction in salaryHealth concerns such as a viral outbreak on a cruise ship or at a travel destination2Political unrest in your destinationPreexisting health condition that impedes your mobilitySafety concerns about your destinationWork obligationsYou change your mind about travelingCFAR has strict eligibility criteria. You must purchase CFAR coverage within a certain period, typically within 15 days of making your initial trip deposit. Your prepaid trip arrangements must be insured when you make the purchase.4NoteYou must cancel your trip within the timeframe allowed by the policy, usually no later than 48 hours before your scheduled departure.CFAR Travel Insurance CostsStandard travel insurance policies that include trip cancellation typically cost 5% to 10% of your total trip costs on average. Adding optional CFAR will increase the cost of your trip protection plan by 40% to 50%.5We surveyed eight travel insurance companies and found that CFAR costs an average of

$223. The study was based on a 28-year-old Florida resident traveling to Costa Rica for 10 days with a total trip cost of $3,500.Bear in mind that costs can vary widely by insurer. In our study, we found premiums as low as $121 and as high as $315. Before buying a trip protection plan, shop around to compare coverages and rates.CFAR Travel Insurance Limits and ExclusionsIt’s important to understand all CFAR requirements and restrictions before you purchase the coverage. Common CFAR exclusions and limitations include:Availability: Some travel insurance providers do not sell CFAR coverage.Coverage requirement: Typically, CFAR policies require you to insure 100% of your prepaid trip costs. For instance, you cannot insure your airfare costs but exclude hotel deposits.Travel insurance policy requirement: You can add CFAR to a trip protection plan, but you cannot buy the coverage as a standalone policy.Purchase time limit: Typically, you must add CFAR coverage within 10 to 21 days of making your first trip deposit.Trip reimbursement limits: CFAR only reimburses up to 50% to 75% of your nonrefundable prepaid trip costs.Trip cancellation time limit: Most CFAR policies require you to cancel your trip no later than 48 hours prior to your scheduled departure.No trip interruption benefit: CFAR coverage only pays when you cancel your entire trip before departure. It will not reimburse prepaid costs for mid-trip interruptions that require you to return home earlier than scheduled.