Cancel for Any Reason Travel Insurance, or CFAR, is something more of our clients have been asking about for 2021 travel. But are these policies still available in light of COVID-19? Here are some things to be aware of:
1. Cancel for Any Reason Does NOT Cover 100% of Prepaid Trip Costs
A common misconception is that Cancel for Any Reason travel insurance will cover 100% of trip costs if you change your mind for any reason. At least with the major reputable travel insurance providers in the U.S., that is not the case. As we wrote in Coronavirus: Which Travel Insurance, TravelEx no longer offers a Cancel for Any Reason upgrade, while TravelGuard (AIG) has reduced its CFAR payout to just 50% (it used to be 75%). Allianz is the best option that remains, and it continues to cover 80% of prepaid non-refundable costs under its Cancel Anytime upgrade, although there are exclusions–see some of the key ones below.
2. Allianz Does NOT Sell Its Cancel Anytime Travel Insurance Online, Only Through Travel Agencies
You won't see the Allianz Cancel Anytime option on its site or on travel insurance comparison sites, because it can't be purchased online, only through a travel advisor.
3. Allianz's Cancel Anytime Travel Insurance MUST Be Purchased the Same Day You Make the Initial Payment Towards Your Trip
It's important to purchase travel insurance the same day that you make your initial payment towards your trip, if you want to include Allianz's Cancel Anytime insurance. You won't be able to add it later, it must be purchased the same day that you make your first payment towards the trip you're insuring.
Separately, also keep in mind that if you need to include insurance for any type of pre-existing medical condition you must make sure you insure the full trip cost. If you only insure part of your trip, you won't be eligible for the coverage of pre-existing medical conditions. And if you later add additional non-refundable trip costs to your itinerary, you must add these to your insurance and pay any additionally due premium within 14 days of purchasing them. You must be cleared for travel by your doctor (it's wise to get written approval) on the day you purchase insurance.
4. Epidemic and Foreseeable Reasons are Excluded as a Reason to Cancel
Allianz's Cancel Anytime does have some exclusions, so be sure to carefully read your policy documents and understand them before purchasing. For example, epidemics (including COVID-19) are excluded as a known event, so you wouldn't be able to cancel simply due to your having second thoughts about COVID-19, or even if there was a COVID-19 outbreak in the place you were traveling to. That said, if you or your travel companion personally became infected by COVID-19, that would be covered, since Allianz is accommodating these types of claims. See Allianz COVID-19 Coverage Alerts.
5. Consider Whether There are Other Ways to Mitigate Risk or Reduce Expenses in the Event You Don't Travel
As you might expect, Cancel for Any Reason coverage isn't cheap. Recent plans that we've purchased for clients tend to be ~12% of the non-refundable trip costs, but keep in mind that this would get you 80% of the non-refundable trip costs back, not 100%.
There may be other ways of mitigating your risk and reducing the amount of your trip that is truly non-refundable.
For example, for airfare, if your worry is losing the value of your non-refundable ticket or receiving travel vouchers you can't easily use, consider using frequent flyer miles and points for your tickets. Any fee to change or redeposit your miles is likely to be significantly less than the loss of a non-refundable fare.
For hotels, reserve with hotel brands such as Four Seasons, which has a guest-friendly COVID-19 policy: reservations made by March 31, 2021, permit free changes up until 24 hours prior to arrival. Flexible rates may be cancelled until 24 hours prior to arrival for a full refund (with the exception of certain holiday periods and certain suites). Prepaid rates aren't refunded, but can offer a date change.
Cruises and other significant travel investments should be protected with insurance, since these generally aren't able to be cancelled without penalty in the days and even weeks immediately prior to the sail date, so we always recommend fully protecting these investments, and even if self-insuring, making sure you carry sufficient medical insurance, including medical transport insurance such as Medjet (see Medical Transport vs. Credit Card Evacuation Insurance).
If you're a TravelSort Client considering a new trip and would like to purchase Allianz Cancel Anytime travel insurance, please be sure to inquire before incurring any expense towards the trip.
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