Macy MaxsonCentrav in partnership with Yonder Travel Insurance
Due to recent global events involving the coronavirus pandemic, travelers are more aware of travel insurance than ever before. We’ll talk you through what kind of insurance you need to prepare you and your client for travel beyond coronavirus.
What is “Cancel for Any Reason”?
Most comprehensive trip insurance policies include a coverage that protects 100% of your insured non-refundable trip expenses should you need to cancel for a “covered event” as listed under the trip cancellation benefit. So what constitutes a covered event?
- You or your family member fall ill, become injured or pass away
- Your destination is hit by a natural weather disaster
- A terrorist act occurs at your destination within a certain time frame from your trip
What’s not covered by trip cancellation coverage? Coronavirus. Pandemics and epidemics are generally exclusions under most trip insurance policies. Therefore, as you’ve come to realize with some of your clients, if your client is unable to go on their trip due to a travel ban, your clients will likely not be covered unless you have a specific type of coverage called “Cancel for Any Reason.”
“Cancel for Any Reason” (CFAR) is a very specific type of travel insurance benefit that is not offered or included with every comprehensive travel insurance policy. The coverage is often an optional upgrade and a time-sensitive benefit. CFAR protects 50-75% of your insured trip cost and allows you to cancel your trip for any reason whatsoever. However, there are a few requirements you have to meet to be eligible to purchase CFAR travel insurance:
- You have to purchase Cancel for Any Reason insurance within 10-21 days of your initial trip deposit date, depending on the plan–make sure you check and take care of it in that time-frame to be eligible for coverage!
- In order to be eligible for compensation, you have to account for and insure ALL prepaid, non-reimbursable trip costs.
- If you decide to cancel your travels, you have to do so at least 48 hours prior to your trip departure.
- If you cancel, you’ll be refunded a portion of the pre-paid, non-refundable trip payments, rather than 100% of it. Generally, this portion is around 75% of you had insured.
What does it cover?
Great question. CFAR travel insurance costs about 40% more expensive, but it offers much more fluid cancellation terms than your standard insurance package or even trip cancellation insurance. With this add on, your client can literally cancel for any reason. Your client no longer wants to travel to your destination (or can’t due to new travel advisories or bans), feels uneasy about going, or gets unexpectedly busy at work–for any of these reasons your client can cancel their travels and receive partial repayments.
Can I use “Cancel for Any Reason” on rescheduled trips?
Unfortunately, CFAR coverage would not be available for rescheduled trips if the original deposit or payment date (not the date the trip was rescheduled) is outside the 14-21 day window.
Do I really need it?
Up to you, but with recent global events–it’s not a bad idea. A few weeks ago many thought their May and June trips would be safe, but with shelter in place orders extending and talks of a resurgence potentially happening later in the fall, it might be a good idea to purchase CFAR.
How do I buy “Cancel for Any Reason” travel insurance?
The time you buy a CFAR policy would be as soon as you make your first payment or deposit. To be eligible to purchase this policy you must meet the following requirements:
- Purchase the policy within 14-21 days of the initial trip deposit date
- Insure 100% (not just a portion) of your prepaid non-refundable trip expenses
- Cancel your trip at least 48 hours prior to your scheduled departure date
Pricing is mostly based on the age of the traveler and the cost of their trip. That is why it is best to compare plans to find the most affordable options since CFAR policies cost anywhere between 12-20% of your client’s trip cost.
The new travel season after the COVID-19 pandemic will be an interesting one. Make sure your clients are covered. CFAR is great for your client, your reputation as an agent, and everyone’s sanity!
Guida Botelho
Shawna Levet
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