A “Cancel For Any Reason” policy may be the best solution to most COVID-related cancellations.
COVID-19 has made travel planning a risky business, especially for those who are not familiar with the virus. Every time it seems that the virus is on the decline, a new variant or sub-variant appears to launch a new attack. Rumours, news and even rumors can shake nerves and disrupt travel plans.
What are your plans for traveling in such a setting?
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More people are opting to purchase travel insurance to cover their trip, in the hope of getting reimbursed if they need to cancel or change. Not all travel insurance covers pandemic-related cancellations. You can avoid potential pitfalls by knowing what you can afford and how you plan to travel.
Travel insurance may sometimes be mandatory
Sometimes, you may not have the option of choosing. Many countries, such as Egypt and Costa Rica, require travel insurance. This is especially true for travelers who are not vaccinated. This will ensure that you don’t get stranded and are able to pay for your medical treatment, extended stay, or evacuation if you contract COVID.
Standard travel insurance covers pandemic claims up to a maximum of $2,500
Squaremouth’s chief marketing officer Megan Moncrief stated that CFAR was the most popular plan for travelers. “When the pandemic hit it became the main piece that could provide any coverage.”
She explained that traditional travel insurance doesn’t cover most pandemic-related claims. Squaremouth reviewed the claims and found that only 30% were made by those who had actually contracted COVID-19. This is the only pandemic claim that will be covered by standard travel insurance policies. The 70% remaining claims were due to other reasons (including border closures or quarantines) and therefore are excluded. However, CFAR would generally cover them.
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Moncrief stated that her company was slow to recommend cancelling for any reason prior to the pandemic. It accounted for less that 4% of sales at the time, she stated. It now accounts for about 12% of sales, compared to 17% in January. AAA recommends that travelers consider policies that include a CFAR element.
“Any reason” does not always mean “any reason”.
Friedlander warned that you should understand your travel insurance and be clear about what it covers and doesn’t cover. Friedlander cautioned that no policy can cover everything.
In response to the pandemic, travel insurers made several adjustments. Moncrief stated that travel policies did not cover pandemic illness treatment at first. This quickly changed and now COVID is covered.
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Friedlander pointed out that insurance policies can have different provisions and “cancel for whatever reason” doesn’t necessarily refer to “any reason”. He also stressed the importance reading and understanding policy provisions before you purchase it.
Moncrief provided examples of exclusions by insurers from CFAR policies
iTravelInsured Travel LX and TravelSafe Classic, Seven Corners RoundTrip Choice Choice and RoundTrip Basic have the following language: “This Cancel for Any Reason Benefit does not cover the inability of the travel supplier for the bargained-for arrangements due to cessation or operations for any reason.”
Travel Insured International: WorldWide Trip Protection: “This Cancel For Any Reason Benefit does not cover penalties for travel arrangements that are not provided by a retail supplier of travel or for the failure of a retail supplier to provide the travel arrangements as negotiated due to cessation in operations for any reason.”
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Charlie Leocha is the president and cofounder at Travelers United. He said that unless he plans to take a very expensive, all-inclusive vacation, he doesn’t usually buy standard travel insurance. Leocha stated that if you have a premium product it could be a great deal. All insurance is great if you are unable to travel because of illness. That’s why you should buy it.
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Leocha stated that he purchases travel insurance policies every year. These policies cover up to six trips, and up to six weeks each trip. His annual policies cost approximately $260, he said.