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At Cruzely, we’re big fans of all cruise passengers purchasing travel insurance before their trip. Given the unique challenges of a cruise – including being on a ship that can be hundreds of miles from land – it’s well worth the cost in our opinion. But choosing which kind of insurance can be confusing.
For example, should you get regular cruise insurance or pay a little extra for “cancel for any reason” coverage?
If you’re not familiar, traditional travel insurance only compensates you if you have to cancel your trip for specific reasons. For more flexibility, cancel for any reason (CFAR) coverage is a paid upgrade to basic travel insurance which lets you cancel your trip and be reimbursed no matter why you decide not to go.
Sounds like a good deal, right? Before you buy CFAR, however, make sure you understand how this kind of insurance works.
Basic Trip Cancellation Insurance
As mentioned above, most policies cover you if you cancel your trip for specific reasons. This usually includes the following:
- Unexpected illness, injury, or death of yourself and/or your travel companion. (A licensed physician must vouch for the health condition which makes you unfit to travel)
- Death or hospitalization of a non-traveling family member
- Weather-related issues or natural disaster either at home or your destination
- Legal obligations (jury duty or being summoned to appear in court as a witness)
Different travel insurance policies differ as far as what they cover, so be sure to read your policy carefully. However, all basic trip cancellation policies will reimburse you only for cancellations caused by specific, unforeseen reasons which are stated in the policy.
If your reason for cancellation matches what the policy stipulates, you will typically receive 100% of your prepaid, non-refundable trip costs for which you insured.
Cancel For Any Reason Advantages
Unexpected events occur all the time – some minor, some major, some good, some bad. Think about how many times you had to change plans in the past week or month because something came up unexpectedly.
Now consider the number of things that could affect your ability to travel – above and beyond the reasons typically covered by regular trip cancellation insurance.
- You have a relative getting married and the date coincides with your trip.
- You quit your job because you simply couldn’t take it anymore. Now you can’t afford to take the cruise.
- The stock market crashes and you decide it’s better to save money than go on a vacation.
The above reasons are just a few of the are many unanticipated events that might force you to cancel your cruise. None of these reasons fit the description of cancellations covered under most basic trip insurance policies. But they would be covered under cancel for any reason policies.
CFAR coverage can protect you if some unexpected event occurs that prevents you from taking a cruise you planned for and paid for in advance. Especially if you’re planning a long-hoped for vacation of a lifetime, CFAR insurance can be a good investment to make sure you don’t lose thousands of dollars if something prevents you from traveling. It simply offers much more flexibility.
Cancel For Any Reason Purchase Requirements
As mentioned earlier, having the cancel for any reason clause added to your travel insurance usually means an added cost to the travel insurance plan. To be eligible to buy the upgrade, you usually have to meet a few requirements.
First, you must insure your full trip. You’ll usually find that you have to insure 100% of your pre-paid and non-refundable trip costs in order to get a CFAR upgrade.
Second, you must purchase CFAR soon after you pay for your trip. You must purchase CFAR within a specific number of days from when you make your initial trip payment. The limit is usually 10-21 days, depending on the policy. This is put in place so that you can’t buy at the last minute when something comes up that causes you to cancel.
So if you’re thinking of purchasing a CFAR policy, do your research early. This isn’t a travel decision that can you can make right before your trip.
Although CFAR insurance can protect you in case of an unanticipated emergency that falls outside of regular cancellation insurance stipulations, this type of insurance also has significant limits.
Not 100%: Depending on the specific insurer and policy, CFAR generally only covers 50-75% of your non-refundable expenses. (For instance, if you paid $500 for airfare to travel to your departure port and had to cancel for a reason not under the normal policy plan, CFAR insurance would reimburse you for 50-75% of the remaining $500, depending on the specifics of your policy.)
Per person limits: Most CFAR policies have a per-person cap for covered expenses.
Last minute cancellations (usually) aren’t covered: CFAR insurance usually requires that you cancel your trip two or more days in advance. (This restriction only applies to the type of cancellation not included under your basic trip insurance.)
As with any insurance policy you purchase, read carefully to make sure you understand CFAR coverage and ask questions if something in the policy seems unclear. The good news? Travel insurance almost always comes with a “free look” period where you can buy, review the policy, and have time to refund if you decide it’s not right for you.
How Much Extra Does Cancel for Any Reason Coverage Cost?
As with most insurance, what you’ll pay for the added benefit of CFAR coverage is going to vary based on a large number of factors. These include the insurance provider, how much your trip costs, age, and other factors.
To give you an idea of the cost, we recently looked into pricing with AIG Travel Guard. In our example, we priced a cruise vacation costing $3,000 total for a couple that was 45 years old.
Overall, the “Preferred” mid-tier plan cost $220 for coverage. Adding on cancel for any reason coverage that paid 50% of the trip cost (there is an upgrade to 75%), cost an additional $42.54. In other words, having this additional coverage was about 1.4% of the total trip cost.
How to Buy a CFAR Policy
If you’re interested in learning more or buying one of these policies, then it’s simple. You first get a quote for standard travel insurance and then select the option to add CFAR coverage before you purchase. If you have trouble you can always call the company to have an agent help you purchase.
Ready to get a quote? You can get a free quote in about 60 seconds with AIG Travel Guard and see exactly how much a plan would cost with or without cancel for any reason coverage.