Covid-19 has sent the world into a tailspin. Lockdowns, quarantine risks and cancelled flights – we’re all being affected in so many unexpected ways. Understandably, the focus thus far has been on world health, prevention and containment. But beyond this, it’s also affected the travel plans of countless people around the globe. Frustratingly, it’s only now, in this turbulent time, that many people are making the unfortunate discovery that their standard travel insurance offers very little, if any, protection.
The cold reality is that most travel insurance plans only cover unforeseen events such as bad weather, accidents, lost luggage or missed flight connections. Unless you bought insurance before the Coronavirus was classified as a “known event” in late January, any Covid-19 associated medical or cancellation expenses you incur won’t be covered. Even if you had bought insurance before this time, that coverage is most probably slim at best.
World health authorities are assuring us that if we’re diligent about following their prevention recommendations it’s just a matter of time before Covid-19 runs its course. Yet even after the face masks have been removed, museums reopen and airlines resume their usual flight schedules, for some the fear of travel disruption may linger. What if another unforeseen event occurs?
Luckily, as travel lovers we don’t need to contemplate a bleak future of stay-cations. While the standard travel insurance premiums won’t protect you in times like these, happily there is another type of insurance that will.
Introducing ‘Cancel for Any Reason’
The only policy at present that will cover known events such as Covid-19 is ‘Cancel for Any Reason’, or CFAR. CFAR will allow you to… well, as the name suggests, cancel your trip for any reason and remain financially protected. Whether you’re a little concerned about Covid-19 affecting your next trip, hear news of political unrest, or simply because you’ve decided to stay in town to attend your 7-year old niece’s birthday party, you can cancel the entire trip and be refunded a large percentage of your expenses. While CFAR is likely the very best travel insurance you can buy, you’ll need to keep a few things in mind to ensure it works for you.
You generally can’t purchase CFAR retroactively
In most cases, you need to purchase CFAR at the same time you purchase your insurance plan. CFAR is not a standalone insurance plan, but an upgrade, and most companies won’t let you add the CFAR upgrade retroactively. Ensure you select this addon at the same time you buy your insurance.
CFAR is time sensitive
In order to be eligible for CFAR, you’ll need to take out a travel insurance plan with the CFAR upgrade within a set number of days after making your initial travel purchases, after booking your hotel or flight for example. Each insurance company has a different procedure; for some the timeframe is 48 hours while others allow up to 21 days. For this reason, we’d recommend purchasing insurance with the CFAR upgrade as soon after making your first travel payments as you can. Then, as you make further bookings in the following weeks, these subsequent expenses can be easily added to your plan.
CFAR allows you to cancel your trip up to 48 hours before – for any reason
In general, you can cancel your trip and enter a claim up to, but no later than, 48 hours before you depart if you want to recoup your expenses. It’s that simple.
It’s true, it will cost you a little extra
A standard travel insurance premium with the CFAR upgrade will generally cost 40%-60% more than standard travel insurance alone. Additionally, you must insure 100% of your trip costs. This includes flights, hotels, event tickets and guided tours.
No company will cover 100% of your trip expenses
Because of the flexibility of the CFAR plan and the higher risk for insurance companies, most agencies cap the refund at between 50%-75% of the insured non-refundable and pre-paid trip costs. Read the documentation of your chosen insurance company carefully to make sure you understand the exact percentage covered in your case. That way, there’ll be no nasty surprises if you do need to claim.
When it’s worth taking out travel insurance?
Quite honestly if you’re just heading out of town for the weekend it probably doesn’t make sense to take on the extra expense of insurance. If, however, you are planning a 1- or 2-week trip to somewhere in Europe or beyond, it would definitely be worth considering travel insurance with the CFAR upgrade.
Regrettably, there’s not much that can be done to cover the Summer 2020 vacation you started booking in December. However, it’s our sincere hope that this information about the ‘failsafe’ CFAR upgrade will give you peace of mind and allow you to book all your future adventures with confidence.