When Is Cancel for Any Reason (CFAR) Travel Insurance Worth It?

If you’ve booked the trip of a lifetime, you might think that nothing can keep you from getting on the plane and experiencing the vacation you’ve dreamed of. Unfortunately, reality doesn’t always play out that way, and you may need to cancel your trip. That’s where Cancel for Any Reason, or CFAR, travel insurance can help. 

Standard travel insurance policies generally cover major trip cancellations for most reasons, such as serious illness, a death in your family, or natural disasters. But you might need cancellation coverage for situations not covered by your standard policy, such as job loss, fear of travel, or issues with traveling companions.

CFAR travel insurance can be clutch where standard travel insurance policies fall short, but it costs more and doesn’t offer 100% reimbursement. So, when does it make sense to get a CFAR policy?

Read on to see what you can expect from CFAR coverage, and find out what questions you should ask if you’re considering adding CFAR to your travel insurance policy.

What Is CFAR?

CFAR insurance is optional travel insurance coverage that enhances your trip cancellation coverage. With CFAR, you can cancel your trip for any reason and receive back a percentage of your nonrefundable trip costs — usually 50% to 75%. 

You can add it to most comprehensive travel insurance policies, though it will increase your costs.

Though you pay more to add CFAR to standard travel insurance, you also get more flexibility. Travel insurance policies without CFAR coverage generally limit the circumstances in which trip cancellation coverage applies, such as illness or natural disasters. With standard trip insurance, you must meet specific requirements to get reimbursed for your lost expenses. Not so with CFAR coverage.

What CFAR Offers

The main benefit of CFAR is its exceptional flexibility with trip cancellations. You can cancel your trip for practically any reason, whether you want to postpone your trip, have a fear of traveling, experience a breakup, or just don’t feel like going anymore. 

The ability to cancel your trip for any reason is huge. Maybe your passport didn’t come in time. Maybe recent reviews suggest the resort you booked has bedbugs. Maybe your travel companion suddenly can’t go, or you want to start a new job but can’t get time off. Any of these reasons would be covered under CFAR but not under a standard travel insurance policy.

CFAR also gives you the freedom to cancel if you’re thinking twice about a trip because of concerns that a trip cancellation policy won’t cover, such as a rise in COVID-19 cases at your destination or reports of unsafe conditions.

The best CFAR policies offer up to 75% of your nonrefundable trip cost back as long as you cancel within the cancellation window, which is usually up to 2 days before your planned departure. 

CFAR covers reimbursement for travel expenses, which can include these prepaid, nonrefundable items:

How Much CFAR Costs

CFAR typically costs about 10% to 50% more than a comprehensive travel insurance policy with standard trip cancellation coverage. For example, you should expect to pay $20 to $100 more when you add CFAR to a standard travel insurance policy that costs $200 otherwise.

Also, keep in mind that CFAR is not a standalone policy. CFAR is an optional benefit that you add to a travel insurance policy. You first need to buy a standard travel insurance policy and then add CFAR to it, so you’re paying for the travel insurance policy plus the CFAR upgrade.

Is CFAR Better Than Other Travel Insurance?

You pay more to get CFAR coverage, but you also have greater flexibility when it comes to getting refunded for a canceled trip. Just because it’s more expensive doesn’t mean it’s better, and you won’t get all of your money back if you have to cancel. But it can offer better coverage if you need it.

For example, comprehensive travel insurance with trip cancellation coverage may offer up to 100% reimbursement for your nonrefundable costs if you need to cancel for a covered reason. That’s better than the 75% you might get with a CFAR policy. 

You might be surprised what a standard travel insurance policy already considers a legitimate reason to cancel your trip. Illness, accidents, weather shutdowns, births, deaths, natural disasters, and even divorce may be covered under your trip cancellation benefits without needing CFAR coverage.

Still, CFAR coverage can be superior to standard travel insurance policies that already come with trip cancellation coverage because you can cancel for any reason, not just the reasons allowed under the standard policy.

As you compare CFAR coverage to standard travel insurance coverage, also compare CFAR to any credit card travel protections you may have. Though CFAR will give you far more cancellation options, credit card travel protection applies to travel you book using your credit card and will come at no additional cost.

When CFAR Makes Sense

With a higher cost and lower payout, purchasing CFAR coverage on a policy that already offers trip cancellation doesn’t always make sense. However, it could save you money if you need to cancel your trip for a reason not covered by standard trip cancellation. 

Ultimately, CFAR coverage can be worth it if you know you may need to cancel your trip for a reason not covered by a standard policy. 

CFAR can be a good choice under these circumstances:

• Your plans aren’t set in stone. If you’re not sure you’ll keep your bookings or might need to postpone your trip, CFAR gives you the flexibility to cancel and start over.
• You’re taking a costly trip. CFAR can save the day if you have significant nonrefundable expenses you’d lose if you cancel your travel plans.
• Your travel companions might flake out. Booking a group trip? If your trip plans hinge on travel companions who might not make it, CFAR coverage can protect you if you don’t want to go on without them.
• You have unpredictable work commitments. Business or work commitments that could require you to stay home can interfere with travel plans and are a good reason to get CFAR coverage. For example, it might be a good idea to get CFAR coverage when you want to book a trip at a great rate that might not be available later but don’t have approved paid time off yet. If it turns out you can’t actually take the time off and need to cancel, you can get reimbursed for most of your expenses.
• You have unpredictable family commitments. If you might need to stay home to support a family member, or you’re unsure about getting a babysitter for kids or pets during your trip, CFAR can offer a backup plan. 
• You’re especially cautious about public health. People who are immunocompromised or otherwise concerned about public health may want to cancel travel when viral caseloads or other public health issues become problematic. For example, COVID-19 spikes continue worldwide, but standard travel insurance coverage generally won’t reimburse you for canceling your trip just because you don’t want to contract the virus — only if you have to stay home because you’re already sick.
• You’re cautious about other situations, such as weather or political instability. As with health concerns, what you consider a good reason to cancel a trip (such as hurricanes or political conflicts) may differ from what your travel insurance considers a covered reason. For example, forecasters may indicate a good chance of a storm affecting your destination. Regular travel insurance generally won’t kick in until there’s a named storm, even if you want to cancel before it gets to that point.
• You or a family member have health concerns. Standard trip cancellation benefits usually cover serious illnesses for you, travel companions, and family members you must care for. However, there are limitations on preexisting conditions. Also, you may need a doctor’s note for your benefits to apply. CFAR can let you cancel if you’re not feeling well but don’t necessarily need a doctor’s visit. And while you might consider your pets to be family, standard travel insurance policies generally don’t, so you’d need to use CFAR coverage for reimbursement to cancel your trip to stay home for an ailing pet.
• You want to make last-minute decisions. Whatever the reason you cancel, CFAR can help you keep your options open and make new plans, usually up to 2 days before your scheduled departure date.

CFAR probably isn’t a good choice if these circumstances apply to you:

• Your travel plans are predictable. While travel plans can always go awry, CFAR coverage is less necessary if you’re unlikely to make major changes. You can probably get by with standard travel insurance coverage that offers trip cancellation benefits for covered cancellation reasons.
• You’re taking a cheap trip. CFAR coverage can be helpful if you stand to lose a lot over canceled plans, but if it won’t cost you much to cancel your trip, it’s probably not worth the added expense.
• Your travel costs are refundable. You only get coverage for nonrefundable prepaid expenses if you cancel your trip under CFAR coverage. If an airline, hotel, or other travel operator will give you your money back, CFAR travel insurance won’t help you.
• You’re buying coverage long after booking. Typically, CFAR coverage is only available within the first 2 weeks or so of booking travel. After that, your trip is not normally eligible for CFAR.
• You won’t get much back. CFAR policies vary, and some CFAR coverage only offers reimbursement of up to 50% of your trip cost. You might not find it worth paying for coverage if you’d only get half of your money back.
• You’re mostly traveling on rewards. While CFAR covers your fees and taxes on award travel, it doesn’t reimburse the value of any points or miles used to book travel. Using this coverage doesn’t make sense unless you have significant cash costs.

Questions To Ask About CFAR

Whether CFAR travel insurance is worth it for your trip depends on your circumstances, and it may be beneficial for some trips but not for others. Ultimately, you need to decide whether the cost is worth the flexibility and if you’d likely see a benefit from it.

As you consider whether CFAR travel insurance is worth it for your trip, ask yourself these questions:

• How likely is it you’d need to cancel for health, work, weather, or other reasons?
• Are your expenses nonrefundable? 
• What are the refund policies of the airline, hotel, tour operator, or other bookings you’ve made?
• Do you have other applicable coverage that’s good enough?
• Are you paying for your trip with cash or rewards?
• Are your travel costs significant?
• Do you need to be able to cancel beyond what’s covered by a standard travel insurance policy?
• Are you confident that your travel companions will keep to your plans?

Final Thoughts

It can make sense to get CFAR coverage in addition to standard travel insurance coverage if you have a lot of money on the line, your plans could change, and you need flexibility. Still, it’s an added cost that isn’t worth it for every trip, so carefully consider your circumstances before you purchase a CFAR travel insurance policy.

For the trip cancellation and interruption insurance benefit of The Platinum Card^® from American Express, eligibility and benefit level varies by card. Terms, conditions and limitations apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by New Hampshire Insurance Company, an AIG Company.