Until the spread of Covid-19, people didn’t give much thought to a world pandemic, civil unrest or natural disasters affecting their travel plans. Unfortunately, they happen and before booking a trip many of us are considering Cancel For Any Reason (CFAR) travel insurance to protect our investment.
When Covid-19 first started spreading, none of us thought it would end up as bad as it is today. Many experienced, as well as first time travelers, booked long awaited dream vacations, put down deposits and bought airline tickets, cruises or travel tours which have now been canceled because of the pandemic. Some people managed to get refunds or new departure dates but unfortunately some travelers weren’t so lucky.
With so much uncertainty about how long Covid-19 will last, Cancel For Any Reason (CFAR) travel insurance may be worth the cost to many travelers. While it is more expensive than regular travel insurance, it may be worth the extra expense knowing that if you decide the timing is not right to travel, you can cancel your plans up to 2 or 3 days before leaving and recoup most of your expenses.
My husband and I having been traveling to Europe for years and until a few years ago, we never thought about buying travel insurance in case of an impending natural disaster. In 2017, we had tickets for a flight from Miami to Prague that was cancelled because of an approaching hurricane. If you’ve ever had to buy last minute one way tickets on any airline, you know prices can be exorbitant, going from $3,000 to over $10,000 a person.
Travel insurance policies can cover things such as trip cancellations, emergency medical treatment and evacuation, rental car damage and baggage loss and we wished we had taken travel insurance a little more seriously. Did you know that you can’t buy regular travel insurance that would cover cancellations or delays related to a storm once it has been given a name, even if it is far out to sea? Once an event has happened, like a storm becoming a hurricane or this world pandemic we are experiencing now, they are considered “known or foreseeable” events. That event is usually not covered by most regular travel insurance policies unless you have a Cancel For Any Reason policy.
After Hurricane Irma affected those travel plans, I decided that before we book a trip to Europe, a cruise or any other expensive trip I would get Cancel For Any Reason (CFAR) trip insurance. I thought I would share what I’ve learned from the two times we have purchased the insurance (thankfully both trips went smoothly and we had no claims). I have no affiliation with any company and this is just information I learned over the last few years while deciding if we should buy CFAR insurance. Always check for current rules as circumstances can change.
Before buying any kind of travel insurance coverage, it is a good idea to call the insurance provider and ask lots of questions concerning your specific needs. Make sure that everything you think is covered actually will be covered for your exact trip.
Cancel For Any Reason travel insurance is an upgrade to a premium travel plan and usually costs about 50 percent more than regular travel insurance. The price is determined by two things, the total cost of your trip and the age of each traveler. The more a trip costs and the older the travelers are, the more expensive the coverage will be. If your trip is going to be expensive, you might decide the insurance cost is a bargain compared to perhaps the loss of thousands of dollars if your trip has to be cancelled. However, if your trip costs are going to be low, you might decide you don’t want insurance if you feel comfortable knowing you will loose any nonrefundable trip costs. Right now, many airlines, cruise companies and hotels are letting you cancel a few days before, without penalties so insurance might not be a necessity.
You need to know that there is a time frame for when the policy must be purchased. It is usually 7 to 21 days (depending on the policy) from your first trip payment and it must cover the entire cost of your trip. The insurance policy will go into effect from the time you leave your home to start your trip, will cover you everywhere you visit and your trip back home.
If you have preexisting medical conditions, there are curtain requirements and a specific time frame in which you must purchase your travel policy so be sure to double check with insurance companies before you book your trip. You must also be considered medically able to travel on the day you purchase your policy.
Be aware that once an event has happened, it is considered a “known or foreseeable” event and Covid-19 is now considered a known event and will not be covered unless you have a Cancel for Any Reason policy. You can check online to review exactly what is and what is not covered in the policies you are considering. Most importantly, read the “fine print”. A good policy should reimburse a portion of your prepaid, forfeited and non refundable trip payments and deposits for airlines, cruise ships, hotels and car rentals if you have to cancel because of an unexpected illness, injury or canceled or delayed flights, etc.
Even if you buy CFAR insurance, you won’t get a full refund of your trip costs, instead it provides partial reimbursement for prepaid and non refundable trip payments if a trip is canceled for a reason not otherwise covered by a policy. Typically, there is a slightly lower priced policy that will reimburse travelers for 50 percent of their nonrefundable trip costs and a higher priced one that will reimburse 75 percent of nonrefundable trip costs. If you cancel for a covered reason like a covered medical problem or a death in the family, the plans pay 100 percent of your cancellation penalties for canceled trips. This is another thing you need to ask about before buying any policy and before you book your trip.
The last thing to know is that you can’t decide on the day of departure to change you mind and not go and still be covered. However, if you had an accident while getting ready to leave or there is a family emergency that will keep you from traveling, it would usually be covered. You must cancel your trip in its entirety at least 2 to 3 days before your scheduled departure date, whether it’s because of a worldwide pandemic, a natural disaster, forecasters are predicting terrible weather for your entire trip or simply because you decide you aren’t comfortable traveling.
The spread of the Coronavirus throughout the world and the knowledge that it can be spread by someone who doesn’t have any symptoms has left many of us wondering what to do about upcoming travel plans. Until there is a vaccine for Covid-19, the majority of us have put all travel plans on hold during these uncertain times. We are staying home and doing our traveling virtually, at least for now.
When the time comes to start thinking about booking a trip, Cancel For Any Reason travel insurance is an option if you are worried that the Coronavirus could have an impact on your travel plans. My husband and I have bought the insurance for our last two trips to Europe and thankfully it was never needed. The peace of mind from having the travel insurance was as they say…priceless.