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How Cancel for Any Reason (CFAR) Travel Insurance Works


Cancel for Any Reason (CFAR) travel insurance allows policyholders to cancel their trips for a variety of reasons, including those not typically covered by traditional policies, and still receive a partial refund of their trip costs. As a premium add-on, CFAR offers the ultimate flexibility, but with higher costs and specific eligibility requirements than traditional travel insurance.

A financial advisor can help you plan for all of your financial and insurance needs.

What Is Cancel for Any Reason Travel (CFAR) Insurance?

Cancel for Any Reason (CFAR) travel insurance allows travelers to cancel their trip for any reason and receive a partial reimbursement of their prepaid, non-refundable trip costs. Unlike standard trip cancellation coverage, CFAR policies can offer reimbursement even if the cancellation is for personal reasons.

Here are three common reasons to consider getting CFAR insurance:

  1. Flexibility: Enables last-minute decisions about travel without losing the entire cost of the trip.
  2. Coverage for the unexpected: Protects against financial losses from cancellations due to change of plans or global occurrences not covered by standard insurance.
  3. Higher reimbursement rates: Typically reimburses a higher percentage of prepaid trip costs when compared with standard trip cancellation coverage.

Requirements to Cancel With CFAR Insurance

One of the first requirements is to purchase the policy within a specific window after making the initial trip deposit. This purchase window is commonly between 15 and 21 days.

Additionally, CFAR cancellations typically need to be executed within a certain timeframe. Depending on the terms of the insurance policy and the provider, the cancellation would need to happen between 48 and 72 hours before the trip.

The exact percentage of reimbursement will also depend on various factors, including the tier of coverage selected or the specifics of the insurance provider’s offerings. CFAR policies typically reimburse a portion of the non-refundable trip costs, which range from 50% to 75%.

In the event of a cancellation, the traveler must promptly communicate with their insurance provider and submit the necessary documentation. This documentation often includes evidence of the insured trip details, such as booking confirmations and payment receipts.

When Should You Get CFAR?

Travelers get Cancel for Any Reason (CFAR) when they have a non-refundable trip booked and want the flexibility to cancel for any reason.

You should consider getting CFAR insurance when you have a non-refundable trip booked and want the flexibility to cancel for any reason without losing a significant portion of your prepaid expenses.

This can be especially beneficial if you’re traveling at higher risk moments, like hurricane season or during political instability, and if your plans change due to personal factors.

Here are four common times when you may consider getting CFAR insurance:

  1. Booking a non-refundable trip: If you’re making reservations for a trip with significant prepaid expenses that are non-refundable, CFAR insurance can provide financial protection in case you need to cancel.
  2. Traveling during uncertain times: When traveling during periods of uncertainty, such as political instability or public health concerns, CFAR insurance offers flexibility to cancel your trip for any reason and receive reimbursement.
  3. Planning a trip with changing circumstances: If your plans are subject to change due to personal or external factors, such as work commitments, family emergencies, or visa issues, CFAR insurance ensures you can cancel your trip and recoup some costs.
  4. Organizing expensive or milestone trips: For special occasions like honeymoons, destination weddings, or milestone celebrations where you’ve invested significantly in non-refundable arrangements, CFAR insurance provides added peace of mind against unforeseen cancellations.

Credit Card Travel Insurance Inclusion

Your credit card might already be working as a travel safety net. Many travel credit cards offer insurance benefits, which can range from trip cancellation and interruption to lost luggage and limited emergency medical services.

However, the coverage may have more restrictions and lower limits when compared with CFAR insurance policies. To evaluate your credit card’s travel insurance, consider these general questions:

  • Does it cover all the destinations and activities you have planned?
  • What are the limits and exclusions?
  • Are the costs of another policy worth it?

How Much CFAR Insurance Costs

CFAR insurance is typically more expensive than standard travel insurance. The cost can vary depending on different factors, including:

  • Total trip cost
  • Traveler’s age
  • Time of policy purchase
  • Coverage limits
  • Destination’s risk level

Taking these into account, CFAR can typically cost between 5% and 10% of the total trip on average.

Differences in pricing between providers can also arise from the scope of benefits offered, underwriting practices and administrative expenses.

Bottom Line

Cancel for Any Reason (CFAR) can offer a partial refund beyond standard travel insurance.

CFAR coverage allows cancellations for a variety of reasons and can offer a partial refund even when standard policies won’t. However, this added protection comes with limitations and requirements, such as specific reimbursement rates and time frames for purchasing and canceling.

Tips for Financial Planning

  • A financial advisor can help you create a financial plan for your specific needs and goals. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • If you’re trying to manage your finances on your own, consider using financial planning software to help you keep track of your finances so you save the money you need and are properly prepared.

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