Edited by: Michael Y. Park
& Keri Stooksbury
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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.
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.
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:
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.Hot Tip:
When you purchase a CFAR policy, you must get a policy that will cover the full amount of nonrefundable travel expenses for the trip. You can’t insure only some parts of your trip, nor can you add more expenses later if you make additional bookings.
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.Hot Tip:
Credit cards such as Chase Sapphire Preferred® Card, Chase Sapphire Reserve®, The Platinum Card® from American Express, and Capital One Venture X Rewards Credit Card offer travel insurance coverage to cardholders. You can only cancel using credit card trip cancellation protection for certain reasons, but you might find the coverage adequate for your needs. Learn more in our guide to the best credit cards for travel insurance.
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:
CFAR probably isn’t a good choice if these circumstances apply to you:
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:
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.
The information regarding the Capital One Venture X Rewards Credit Card was independently collected by Upgraded Points and not provided nor reviewed by the issuer.
For rates and fees of The Platinum Card® from American Express, click here.
Cancel for Any Reason means what it sounds like: You can cancel your trip for any reason and receive reimbursement. Standard travel insurance policies generally offer trip cancellation benefits, but only for specific reasons. With Cancel for Any Reason coverage, it doesn’t matter why you need to cancel, you can just do it.
For years, Cancel for Any Reason travel insurance wasn’t available in New York because New York law required insurance to depend on a triggering event. As Cancel for Any Reason insurance doesn’t require any particular peril for benefits to apply, it technically wasn’t considered valid insurance under New York law. Updated guidance during the COVID-19 pandemic loosened policies to allow for Cancel for Any Reason travel benefits, though policies may still be limited for New York residents.
Comprehensive travel insurance policies generally offer trip cancellation benefits, though your benefits only apply in specific circumstances. If you want to cancel for any reason, you need to purchase CFAR coverage as an add-on to your standard travel insurance policy.
Trip cancellation coverage usually reimburses you for up to 100% of nonrefundable travel costs, provided you cancel for a qualifying reason. CFAR coverage is an optional upgrade to standard travel insurance policies, allowing you to cancel for any reason — not just qualifying reasons — and get 50% to 75% of your nonrefundable costs back, depending on the policy.
You can purchase CFAR travel insurance from most travel insurance companies. It’s typically available as an add-on to standard travel insurance policies.
It’s best to purchase CFAR insurance shortly after you book your trip. Most CFAR policies have limits on how long you have to purchase CFAR after making a booking — usually about 2 weeks.
Getting CFAR insurance makes sense if you stand to lose significant nonrefundable costs because of trip cancellations and you’re concerned you may need to cancel for a reason not covered by your standard travel insurance policy.
Credit card travel protection can be helpful but is often limited. As with a standard travel insurance policy, you should expect your credit card trip cancellation benefit to have exclusions and only cover specific reasons for canceling. You need CFAR insurance if you think you might need to cancel for reasons not covered by your credit card’s trip cancellation benefit.
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