Cancel and Interruption for Any Reason Coverage: The Difference Between Two Flexible Travel Insurance Options
Whether it be for work or leisure, over the course of the past year, frequent travel has come to a standstill due to the ongoing COVID-19 pandemic. With the recent development of a long-awaited vaccine, many are eager for mobility and hopeful to begin making travel arrangements for the upcoming year as the world tries to return to a sense of normalcy.
However, as 2020 revealed the unpredictability of the pandemic, travelers may still be reluctant to book trips due to lingering uncertainty. Travelers need assurance that they and their wallets will be protected when booking their next trip.
That’s why the travel insurance industry offers protection plans that allow for cancellation or interruption of travel plans for any reason.
As the world is becoming more restless to get back on our feet, Cancel for Any Reason (CFAR), and a newer benefit, Interruption for Any Reason (IFAR), are great additions to coverage plans that can provide customers with the confidence they need to book their next trip during these trying times.
Seven Corners, a global travel insurance company, has experienced an increase in calls from customers asking how CFAR and IFAR could be of benefit. Our team put together frequently asked questions and answers regarding what CFAR and IFAR are, what they cover, and how they can be useful when preparing for a trip.
What is CFAR?
CFAR is an optional benefit offered on certain trip protection plans that allows travelers to cancel trips for any reason not otherwise covered.
Customers will be reimbursed up to the maximum benefit amount shown in the schedule of benefits for the unused, forfeited, prepaid non-refundable payments or deposits for the travel arrangements you purchased for your trip, when you cancel your trip 48 hours or more before your scheduled departure date for any reason not otherwise covered by the policy.
When is CFAR beneficial?
CFAR can help travelers if they must cancel trips due to change of mind, financial hardships or reluctance to travel due to lingering concerns over COVID-19.
Most especially, since the onset of COVID-19, travelers want the option to cancel their trip if they become fearful about traveling. Fear is not a covered reason for trip cancellation, so CFAR is the only way to ensure you can cancel if you’re afraid to travel.
Additionally, if travelers are nervous about planning international trips such as honeymoons, spring break plans or destination weddings due to COVID-19 concerns, CFAR may be a good option.
What is IFAR?
IFAR, Interruption for Any Reason, is an important option for coverage plans in today’s travel climate that gives travelers the option to interrupt their trip once it has already begun. IFAR is being added to plan designs in response to the large increase in travelers purchasing CFAR during the COVID-19 outbreak of 2020.
When is IFAR Beneficial?
IFAR could be beneficial to travelers for a variety of reasons. Here are a few examples:
- Three days into the first leg of your trip you have a disagreement with your host and want to leave, so you decide to go to your next destination early.
- You are traveling and learn your dog at home is ill, and you wish to return home early.
- You have a falling out with a friend with whom you are traveling and want to come home early.
- You have an unexpected financial crisis and want to go home early.
- You receive a call while traveling and learn your house was destroyed by a fire or tornado, and you want to return home immediately to see what remains and take appropriate next steps.
- You are not comfortable with the steps your resort is taking regarding COVID-19, so you decide to return home early.
With IFAR coverage, if one must interrupt their trip, travelers will be reimbursed up to the maximum benefit amount shown in the schedule of benefits for the additional transportation cost to either:
- Join your trip if you must depart after your scheduled departure date or travel via alternate travel arrangements; or
- Rejoin your trip from the point where you interrupted your trip to the next scheduled destination; or
- Transport you to your originally scheduled return or final destination of your trip.
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What is the difference between IFAR and CFAR?
You should add CFAR to travel plans if you could potentially cancel your trip before you’ve departed, and CFAR typically requires you to cancel 48 hours or more before your scheduled departure date. IFAR comes into play after you’ve already departed on your trip but no sooner than 48 hours after departure.
Both CFAR and IFAR reimburse you for 75 percent of your nonrefundable and insured trip costs if you cancel or interrupt for a reason not otherwise covered.
What is the cost of CFAR and IFAR?
Travelers can expect most CFAR benefits to increase trip insurance costs by 40 percent to 50 percent because the plan now includes much wider coverage for trip cancellation.
IFAR is a much less expensive option. With CFAR and IFAR, travelers can cancel or interrupt their travel plans for any reason they wish. The increase in price occurs because the insurance company now bears an increased risk.
How do I know if I qualify for CFAR or IFAR?
To qualify for CFAR and IFAR travelers must:
- Purchase the benefit within the time sensitive period. This is typically 20 days after you make your initial trip deposit or payment.
- Insure the full cost of any subsequent arrangements added to your trip within 15 days of the date of your payment for them.
- For CFAR, you must cancel your trip two or more days prior to the scheduled departure date of your trip. For IFAR, you must interrupt your trip 48 or more hours after the actual scheduled departure date.
It is important to note these benefits do not cover penalties associated with travel arrangements not provided by the travel supplier for the trip.
CFAR and IFAR are beneficial travel insurance options for travelers eager to return to normalcy. With these flexible travel insurance benefits, travelers have a way to expand coverage for unforeseen cancellations or interruptions that could affect travel plans.
Jeremy Murchland is the President of Seven Corners, a global travel insurance company.