When You Don’t Need ‘Cancel for Any Reason’ Travel Insurance

If you’re going on an expensive tour or cruise, money expert Clark Howard wants you to protect your travel plans from events you can’t control. That’s why he’s a big fan of travel insurance, which often includes the option to add what’s known as “Cancel for Any Reason” (CFAR) coverage.

With CFAR added to your travel insurance policy, you have a much better chance of getting some of your money back if something goes wrong with the trip.

“It’s additional,” Clark says. “It won’t give you back 100% of your money, but usually it will be 50%, 60%, 75% or 80% of the money depending on what level of coverage you buy.”

But depending on your trip providers and their policies toward cancellations, you may not even need CFAR. 

Traveling? Here’s Why You May Not Need ‘Cancel for Any Reason’ Coverage

Your Airfare Is Refundable

If you buy a refundable airline ticket, you can get your money back if you decide not to fly. A refundable ticket also means you are allowed to change your travel plans without any hassle.

Please note that refundable fares typically cost more than non-refundable ones. The price differences vary widely, from just $30 or so to thousands of dollars.

Read Clark’s #1 travel rule for cheap travel.

Your Hotel Is Refundable

If your hotel is fully refundable, you can typically get your money back if you cancel within 24 to 48 hours before check-in. Canceling after that time may subject you to a fee, but it depends on the hotel.

As is the case with airfares, a refundable rate for a hotel room can cost just a few dollars more per night or be substantially more expensive than a non-refundable rate.

When you buy a refundable room, you typically won’t need a CFAR policy because you are already covered by the hotel’s cancelation policy.

“If I’m flying somewhere — you usually book your airfare pretty well in advance — I also book a hotel room at the same time,” Clark says. “I book the best deal I can find for where I’m going but always a refundable room.”

Read up on whether you should ever book a nonrefundable room.

What if You Have a Travel Credit Voucher?

You may wonder if you can use Cancel for Any Reason coverage if the airline gives you a credit voucher. Typically these credit vouchers expire one year out.

Clark says many airline carriers stipulate that credit vouchers can’t be used with trip insurance.

In this case, you may have to wait to make a claim against your CFAR policy until the airline credit has expired to prevent claiming against the insurance and using the credit, too.

“This has been a gray area with Cancel for Any Reason insurance, and it depends on the language of the policy,” he says.

To be sure? Read the language in the insurance policy.

“Some policies make you wait until the credits have expired, and then you get back your 50, 60 or 75%, depending on what kind of Cancel for Any Reason you have. But you do have to wait generally for it to be refunded until the window is closed,” Clark says. 

Final Thoughts

CFAR is great but not always necessary if you have other refund options.

Clark says you’ll have to do some homework by digging into your travel insurance terms to see if it allows you to make a claim against your CFAR policy as well as use your airline credit.

“You’ve got to read the language of the contract on how you trigger Cancel for Any Reason to make sure that the non-refundable airline tickets you’ve bought can be forfeited and you get back three-quarters of the money,” Clark says.

Check out our all-in-one guide to travel insurance to discover the various types of travel insurance plans available to you.