As with most other facets of life, the pandemic has changed the way many of us think about travel. With the fear of COVID-19-related cancellations, many travelers are seeking financial refuge by purchasing travel insurance policies. In fact, one-third of U.S. travelers say they are more likely to buy travel insurance for upcoming trips, primarily due to the pandemic, according to a recent survey from AAA.
But, standard trip cancellation insurance may not cover all cancellations related to the pandemic. That’s why buying so-called cancel-for-any-reason (CFAR) coverage is worth considering since this type of policy may allow you to recover more of your non-refundable trip costs than standard travel insurance. While you likely will pay more for your travel insurance policy by adding CFAR coverage, the peace of mind it provides may justify the cost.
To help you make a more informed travel coverage decision, we analyzed the top providers of cancel-for-any-reason travel insurance.
Plans: Preferred & Deluxe
Why we picked it: Cancel-for-any-reason insurance is all about flexibility, and that’s what you’ll find at AIG Travel. Not only can you choose a reimbursement level of 50 percent or 75 percent, you’ll also find maximum benefit levels of $75,000 or $112,500.
Potential drawbacks: If you want CFAR, you’ll need to add it within 15 days of your first trip deposit. That’s a tighter timeframe than some competitors who allow up to 21 days.
C&F Travel Insured
Plan: Worldwide Trip Protector Plus
Why we picked it: The plan will reimburse 75 percent of your trip cost up to $75,000 and also covers airline change fees and reward deposit fees. You’ll have 21 days to add CFAR to your policy after your first trip payment.
Potential drawbacks: The plan covers up to $100,000 for emergency medical expenses per person, which may be insufficient for some travelers.
Why we picked it: The plan reimburses 75 percent of your trip cost up to $75,000 and also includes a generous amount of missed connections coverage at $2,500 after three hours. You’ll have 21 days to add CFAR to your policy after your first trip payment.
Potential drawbacks: The plan’s $100,000 cap for emergency medical expenses may be insufficient for some and the travel delay reimbursement of $750 is lower than other competitors.
Plan: Safe Travels Voyager
Why we picked it: The plan will reimburse you 75 percent up to $75,000 and includes a generous amount of trip delay coverage at $2,000. You’ll have 21 days to add CFAR after your first trip deposit.
Potential drawbacks: The Safe Travels Voyager plan has superior benefits; we didn’t find any notable disadvantages.
USI Affinity Travel Insurance Services
Plans: Travel Insurance Select Plus & Elite
Why we picked it: The plans will reimburse you 75 percent of your non-refundable trip deposits up to $75,000 and include coverage for sports equipment delays. Both plans also include a concierge and a baggage service that will help track down and expedite the return of your lost luggage.
Potential drawbacks: The maximum trip duration coverage at 30 days is lower than some competitors, but should be more than sufficient for most travelers.
How Does Cancel-for-any-reason Coverage Work?
You typically can add cancel-for-any-reason coverage to your travel insurance plan at an additional cost. Once you add CFAR coverage to your policy, you can cancel your vacation for a reason not covered under your comprehensive policy.
Every insurance company will have a different deadline for when you must purchase CFAR coverage. But the timeframe usually falls somewhere between 14 to 21 days before your trip.
To ensure you get reimbursement for your trip, travel insurance companies usually require you to cancel within two to three days of your departure and insure 100% of the expedition. While policy terms can vary, you can expect most insurance companies to reimburse you up to 50% to 75% of your total non-refundable trip cost.
Be sure to read the terms of your policy, so you understand the criteria for reimbursement. You don’t want to end up in a situation where you miss the cancelation deadline, cancel, and receive nothing back.
How Much Does Cancel-for-any-reason Coverage Cost?
The average cost for a comprehensive travel insurance plan is roughly 5 percent to 10 percent of your total non-refundable travel expenses.
Buying CFAR coverage will likely increase the cost of a policy by 40 percent. So, suppose your trip costs $3,000, and your travel insurance ends up costing $150 (5 percent of your total travel bill). Then, if you decide to add CFAR coverage, you’re looking at paying $210 in travel insurance coverage.
Can I Cancel My Trip If I Contract COVID-19 and have CFAR?
As long as you cancel your travel plans within the policy deadline, you’ll likely be covered if you need to cancel due to COVID-19. Check the fine print of your policy to verify the terms and conditions of coverage.
Can I Cancel My Trip Due to the Pandemic If I Don’t Have CFAR?
Like other covered illnesses that make you unfit for travel, testing positive for COVID-19 before leaving on your trip can be covered under trip cancelation coverage. However, your insurance provider may require proof of a positive test result as well as written confirmation from your doctor that you’re medically unable to travel.
In the unfortunate event, if you test positive for COVID-19 while traveling, you might receive other travel insurance benefits such as medical expense coverage, trip interruption coverage, and emergency medical evacuation coverage. But, you will also need to provide proof of diagnosis.
On the other hand, if you don’t test positive but are simply fearful of either contracting COVID-19 or traveling during a pandemic, travel cancellation insurance won’t reimburse you for your trip based on fear alone.
Since every insurance policy has different terms, check with your insurer to verify guidelines for COVID-19 cancellations.
We analyzed 24 travel insurance plans that offer cancel-for-any-reason coverage. We used each company’s highest-scoring plan(s) to score each company. Scores were based on:
CFAR purchase deadline: 30 percent of score. Companies scored higher for having more time allowed to add CFAR after the initial trip deposit.
CFAR maximum reimbursement: 20 percent of score. Companies scored higher for having a higher reimbursement percentage of the trip cost.
CFAR maximum dollar reimbursement: 50 percent of score. Companies scored higher for having a higher dollar maximum for CFAR reimbursement. For travelers booking expensive trips, this is an especially useful metric. The CFAR reimbursement is generally a function of the plan’s maximum trip cancellation reimbursement. For example, a trip worth $100,000 can reimburse more for CFAR than a policy with a trip maximum of $50,000 (assuming both policies offer the same CFAR reimbursement percentage).
Ashley Kilroy is a personal finance writer and content creator. In addition to being a contributing writer at Forbes, she writes for solo entrepreneurs as well as for Fortune 500 companies.