Cancellation insurance for any reason may be unwise for travelers

Concerned about illness or an unforeseen event, many vacationers purchase cancellation-for-any-reason travel insurance when booking an expensive trip. Such coverage is costly and often unnecessary, says a travel insurance expert.

Cancellation for any reason (CFAR) insurance is an optional upgrade for travelers who purchase trip cancellation insurance, says Jenna Hummer, director of public relations for Squaremouth, an online travel insurance marketplace. The most common reasons for cancellation, however, are covered by basic trip cancellation policies, she says.

“CFAR is only useful if you are concerned about having to cancel your trip for a specific reason that is not covered by your trip cancellation benefit,” Hummer says. “These reasons could include border closures at your destination, fear of traveling to your destination, and loss of enjoyment at your destination due to closed beaches, poor weather, or a change in itinerary.”

The No. 1 reason for trip cancellations is the death or illness of the insured traveler, she says. The second most common reason is the death or illness of a family member, and the third most common reason is the death or illness of a traveling companion.

In 2024, according to Squaremouth data, the average cost of a trip cancellation insurance policy was $404. Policies with the additional CFAR coverage had an average cost of $633, a 57% increase over the basic trip cancellation insurance policy.

“This percentage increase varies from policy to policy, depending on the provider,” says Hummer. “This benefit comes at an additional cost due to the increased risk for the insurance provider and the increased peace of mind for travelers who want the ability to cancel no matter what and recover a part of their costs. »