When it comes to protecting your next vacation against unforeseen events, there's insurance — and there's insurance.
In fact, when most people think of travel insurance, they're probably thinking of "cancel for any reason" insurance, which allows you to cancel your trip for any reason and get a partial refund.
"Travel insurance can help you get your money back should you have to cancel for unforeseen covered reasons," explains Bailey Foster, vice president of trip insurance at Trawick International. "But if you want more flexibility, you may need 'cancel for any reason' coverage."
"Cancel for any reason" insurance is hot this year. A new report by Cover Genius finds travelers are willing to pay extra for this comprehensive protection. The research also suggests that customers are happier with the added protection, with higher customer satisfaction scores when they buy a "cancel for any reason" policy.
The reason? "'Cancel for any reason' is a more comprehensive option many travelers choose for extra peace of mind when booking a trip in advance," says Kyle Keogh, Cover Genius' chief business officer for the Americas.
Normal travel insurance will cover a wide variety of events, notes Joe Cronin, president of International Citizens Insurance. "'Cancel for any reason' travel insurance provides an additional level of coverage to give you peace of mind before booking your trip."
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What Is ‘Cancel For Any Reason’ Travel Insurance?
"Cancel for any reason" insurance, as the name suggests, allows you to cancel your trip for any reason and receive a partial refund of your prepaid, nonrefundable trip expenses. It's typically sold as an add-on to traditional travel insurance.
Here's what you need to know about "cancel for any reason" travel insurance:
It's more flexible than conventional travel insurance. You can cancel your trip for any reason. Worried about terrorism? You can call the whole trip off. Something came up at work? You can cancel. Just don't feel like going? No problem. You can cancel for any reason.
But you only get a partial refund. This is worth repeating: You won't get all of your money back. "Cancel for any reason" returns between 50% to 75% of your prepaid, nonrefundable trip costs.
There are other limits. Most "cancel for any reason" policies require that you buy it within a certain number of days from the initial trip deposit. For example, depending on the specific product, Trawick's policies must be purchased within 14 to 21 days after the initial trip deposit, and customers must cancel at least 48 hours before their departure.
It's expensive. A reliable "cancel for any reason" policy will add to the cost of your trip — and prices are going up (more on that in a moment). Yes, it's the most expensive kind of travel insurance you can buy.
Finally, bear in mind that "cancel for any reason" insurance is not a magic bullet. Although you can cancel for "any" reason, there are still restrictions, notes Chris Carnicelli, CEO of Generali Global Assistance.
"You have to ensure that the coverage truly allows cancellation for nonstandard reasons not typically covered in standard plans," he says. "But this additional layer of flexibility can be invaluable for travelers with unpredictable schedules or those seeking extra peace of mind."
If you're a nervous traveler or you spent a lot of money on your trip — money you can't afford to lose — then a "cancel for any reason" policy might be worth considering. But there are significant restrictions, and it's pricey.
What's New In ‘Cancel For Any Reason’ Travel Insurance For 2024?
There are a few new developments this year in "cancel for any reason" insurance.
- Increased demand: The pandemic may be on the wane, but travelers are still nervous about their upcoming trips. That's led to increased interest in travel insurance (in travel insurance lingo, "uptake" rates) and specifically in "cancel for any reason" insurance. Nearly 7 in 10 travelers now say they are more likely to buy travel insurance, according to research by the U.S. Travel Association.
- New coverage: In addition to traditional travel insurance companies, some platforms now offer "cancel for any reason"-type coverage. For example, Airbnb offers insurance that allows you to cancel and get back 100% of what you paid. (Technically, it's not a true "cancel for any reason" policy — but the reasons include certain flight delays, a serious injury or illness or a natural disaster). Vacation rental platforms such as Vrbo also offer similar coverage.
- Higher prices: Higher demand has translated into higher prices. A typical "cancel for any reason" policy can cost you up to 12% of the cost of your prepaid, nonrefundable expenses. And anecdotal evidence suggests prices are rising, although no one is tracking “cancel for any reason” rates systematically.
So what's making "cancel for any reason" so popular? I asked Robert Gallagher, president of the US Travel Insurance Association. He told me many travelers find "cancel for any reason" policies a worthwhile investment to protect their trip.
"But," he adds, "It is important consumers understand travel insurance plans vary."
Bottom line: More insurance providers entering the market with expanded coverage choices. But you'll also have to pay more in 2024.
What Kind Of ‘Cancel For Any Reason’ Policies Are Available?
"Cancel for any reason" policies come in all shapes and sizes. Here are a few options for your next trip.
Allianz Partners USA offers a "cancel anytime" upgrade to its most popular plans, including OneTrip Prime and OneTrip Premier. These policies may reimburse up to 100% of your prepaid, nonrefundable expenses if the trip is canceled because of an unexpected and unforeseen covered reason, such as serious illness or injury to the insured, natural disasters, or an arrival delay of 24 hours or more at the traveler’s destination due to severe weather.
"A 'cancel anytime' upgrade expands cancellation coverage to include most unforeseeable circ*mstances, including a simple change of plans," says Allianz spokesman Daniel Durazo.
Berkshire Hathaway Travel Protection's (BHTP) LuxuryCare has a 'cancel for any reason' option that reimburses you at 50% of nonrefundable trip payments if you have to cancel your trip for any reason not listed in the description of coverage. BHTP's LuxuryCare also allows you to cancel for medical or work reasons. It also provides generous coverage of $100,000 in medical expenses and up to $1 million in medical evacuation expenses.
"Cancel for any reason" policies come in various flavors. For example, Insured Nomads has three Explorer Guardian policy tiers which have a "cancel for any reason" option. Coverage ranges from interruption and cancellation of 100% of cost up to $10,000.
"It’s important to know which policy is best for you and which you’ll benefit from the most depending on the trip you are taking," says Weronika Popiolek, a spokeswoman for Insured Nomads. "Flexibility is key."
Trawick International has trip cancellation plans that pay up to 100% of prepaid, nonrefundable travel expenses if a trip is canceled for a covered reason. If you add "cancel for any reason" coverage to your plan, you can be reimbursed a generous 75% of nonrefundable, prepaid expenses. (Trawick's "cancel for any reason" has won numerous awards because of their generous reimbursem*nt provision.) Trawick also recently introduced a new product, Safe Travels Armor, which lets add "cancel for any reason" coverage but also includes $100,000 of primary medical coverage.
US Fire offers one of the most flexible "cancel for any reason" plans. It doesn't require you to insure the total amount of your trip subject to cancellation penalties. You can insure your deposits as you make them so that you do not pay more in insurance premiums than the deposits you have made on your cruise or trip. And US Fire will pay more than 75% of your cancellation penalty if the penalty amount is a smaller percentage of your total declared trip cost, according to Dan Skilken, president of TripInsurance.com.
But no matter what you buy, a "cancel for any reason" travel insurance policy can be costly. Is there a way to save money? There might be.
Is There An Alternative To ‘Cancel For Any Reason’ Travel Insurance?
Maybe, say experts. Thomas Carpenter, who co-owns Huckleberry Travel, says most "cancel for any reason" policies offered by travel insurance companies are "incredibly expensive" when you add it to third-party insurance.
"In my view, it's not a very good value because the insurer will only pay out 50% to 75% of the nonrefundable cost of the trip," he says.
Besides, most third-party insurance coverage already includes cancellation protection for covered reasons — for example, if you get sick or have a death in the family.
"But if you want to cancel because you're having a bad hair day or something like that — you won't likely get the full cost of your trip reimbursed, even if you have 'cancel for any reason' protection," he notes.
Instead, you'll get part of your trip refunded.
Carpenter says there's a better way. Trip protection policies from the tour operator, airline, or cruise line often offer "cancel for any reason" coverage at a lower price point.
"You should be aware that sometimes, the coverage requires that you get the value of your trip returned to you in the form of a future travel credit. And those trip protection policies are not comprehensive insurance policies in most cases. They may not provide emergency medical, medical evacuation, trip delay, trip interruption, lost or stolen luggage, or personal effects," he adds.
So you can save some money — but there's a trade-off. Insurance offered through a provider doesn't always cover a bankruptcy, so make sure the tour operator or cruise line is in good financial shape before pushing the button on this option.
‘Cancel For Any Reason’ Buying Advice: Don't Forget To Follow These Rules!
No matter what you do, here are a few rules you should follow when considering "cancel for any reason" insurance.
“Rule number one — buy it early, and with "cancel for any reason" specifically, buy it with your first payment for the trip," advises Lisa Conway, chief insurance officer for battleface.
You'll want to make sure you insure the full cost of your trip, and if you add arrangements at a later date, make sure you add them to your policy. (I've seen travel insurance companies reject a claim because of this requirement.)
Conway also says you have to cancel promptly and file a claim.
"You must do it within a certain timeframe, usually 48 hours prior to the indicated trip start date on your policy,” she says.
And finally, you have to read the travel insurance policy you're considering very carefully. And then read it again. That's the advice of Anthony Radchenko, CEO of AirAdvisor.
"You'll want to thoroughly understand what will be covered, the percentage of reimbursem*nt, coverage limits, exclusions, and how long you have to file a claim," he says.
If you don't, you could end up overpaying for coverage you don't need — or getting coverage you can't use.
