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Is ‘cancel for any reason’ travel insurance worth the cost?

by on Fri April 25, 2014 • 3 Comments


It’s three days before your annual mother-daughter cruise to the Bahamas and your mom calls with some bad news: her dog just had emergency surgery and she simply can’t bear to leave him alone with just the dog sitter so she can’t make the trip. If you didn’t buy travel insurance, then this trip is about to get a whole lot pricier.

For those who don’t want to pay more for fully refundable fares or don’t fall within the list of acceptable conditions for standard travel insurance coverage, Cancel For Any Reason (CFAR) insurance is another option.

What does CFAR cover?

According to, “CFAR is a specific type of travel insurance coverage that offers travelers the opportunity to change their plans for reasons other than those listed as “covered reasons” on their travel insurance policies. Most travel insurance policies will provide benefits only if you cancel your trip for a reason that’s listed in your policy details, such as:

  • Sickness, injury or death (as certified by a physician) of you, a family member, your traveling companion, or a business partner;
  • Inclement weather causing delay or cancellation of travel;
  • Your primary residence or destination being made uninhabitable or inaccessible by natural disaster, vandalism, or burglary;
  • You or your traveling companion being hijacked, quarantined, subpoenaed or required to serve on a jury;
  • Theft or loss of passport, visa, or required travel documents within 14 days of departure; or
  • You or your traveling companion being called to active military service.

CFAR allows you to bypass that list, giving you greater flexibility and freedom of choice when you’re making important decisions about your travel plans.

However, this flexibility comes at a premium

CFAR can cost upwards of $150 when purchased as an upgrade to higher-end insurance plans, which typically average around $200.

There are also restrictions on when you can purchase CFAR plans (typically within 15-30 days of making an initial trip payment) and when benefits are provided. Many CFAR policies require that you must cancel your plans and notify your travel suppliers at least 48 hours prior to your scheduled departure, and even then will only reimburse a portion of the total trip cost, typically 50 to 75 percent.

Is CFAR worth the cost?

To find out if CFAR is worth the $350 up-front payment, calculate your non-refundable trip cost, including any carrier fees, and consider your propensity for last-minute changes in plans as well as your personal risk tolerance.

For most business or solo travelers, the biggest cost of canceling or delaying a trip arises from change fees (typically $200 per ticket on most major airlines), which, though exorbitant, don’t merit paying more for CFAR. You can use the remainder of your ticket to book a flight another time anywhere the airline flies.

And if you booked a trip with miles, you’ll be able to redeposit them for a fee that’s usually $200 or less per ticket.

For larger groups or all-inclusive trips like cruises or tours that require deposits or carry high change fees, CFAR may be worthwhile. Say, with the example above, you already paid the non-refundable 20% deposit on the $4,000 cruise for you and your mom. With CFAR, you would save up to $250 (by paying $350 for the insurance and receiving $600, or 75 percent reimbursement of the $800 deposit).

Similarly, if you have had to cancel two out of the last four trips you’ve planned due to last-minute work events, the odds are high (50/50) your next trip won’t go forward as planned. In this case, if your trips tend to be on the more expensive side, consider buying CFAR.

Otherwise, if you aren’t wed to a particular destination, you may want to wait till the last minute to book– sometimes this can yield better travel deals, too.

Figure out your risk tolerance and plan accordingly

Although the odds of canceling last-minute are relatively low for most travelers, as with any insurance, risk tolerance also figures in to the equation. You may simply find CFAR worth the peace of mind if you don’t like taking the chance that something may come up preventing your trip or the flights to your intended destination will be full if you wait to book.

For some, this assurance is worth the steep price tag. But given that basic comprehensive coverage plans start at just one-tenth the price, many consider CFAR a privilege, not a necessity.

> Read about when you need medical coverage for travel (what your card doesn’t cover)

Christina Tincu has spent the majority of her life dreaming and scheming to travel the world and recently made that dream a reality by finding a job that sends her abroad for months at a time. In the past year or so, she has traveled throughout Timor Leste (East Timor), South Africa, Brazil, Jamaica, and Thailand for work, with weekend trips to Bali, Cambodia, Laos, Vietnam, Zambia, and Zimbabwe. She is lending her travel savvy (aka lessons learned from making honest mistakes and being duped) to keep everyone else safe.  She loves to swim in open waters, following a new journey wherever it leads, and the word “tiny”. 


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3 thoughts on Is ‘cancel for any reason’ travel insurance worth the cost?

  1. joanne

    The price of airline tickets have to be included in the total trip cost when you buy CFAR insurance. We usually fly Business on oversea flights which adds a substantial amount to the trip costs and therefore increases the cost of CFAR. Plus you are only reinbursed $200 for a change fee but change fees for business class run $450. So is it still worth buying CFAR even if you might need to cancel for reasons not covered on a standard trip insurance policy??


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