It is safe to say that Travel Insurance is not a ‘one size fits all’ need. What works for one kind of traveler, may not work for another traveler. One big decision facing travelers right now is should I buy a policy with a ‘cancel for any reason’ option. The truth is that depends on what type of vacation you will be taking, what supplier you will be traveling with, and what Travel Insurance company you are offered.

Throughout the rest of this blog, we will look at what Travel Insurance companies offer, if they offer ‘cancel for any reason’ and a few other things you should think about when booking your vacation and purchasing Travel Insurance. With the Travel Industry slowly opening up, and The Holidays right around the corner, if is quite possible you will be traveling somewhere, some how over the next few months. You should think about this: Should you pay extra for guaranteed coverage – or should you take a chance and save money on a policy you may not be able to use?

What Is The Meaning Of Cancel For Any Reason?

The basic definition is this: ‘Cancel for any reason’ allows you to cancel your trip, whatever your reason may be, and receive 50% – 75% (depending on the Insurance Company) of the value of your plans nonrefundable expenses. This usually covers airline tickets, possibly hotel accommodations, cruises and tours inside their normal cancellation policy. (This means within a preset period of time, the cruise or tour becomes 100% nonrefundable.) We know that in March 2020 when COVID-19 forced millions of vacations to be cancelled, at that point whether you had ‘cancel for any reason’ or not, you most likely did not recoup much from the Travel Insurance companies. The reason for that was in their policy fine print was a line stating that a pandemic was not covered. The ‘good news’ is that over the last 6 months, things have changed.

Here are the main things to know about ‘cancel for any reason’ coverage:

  • Without ‘cancel for any reason’ coverage, you receive coverage only for reasons named in the policy
  • A ‘cancel for any reason’ policy gives you maximum flexibility. You can cancel because it’s cloudy out. You can cancel because you’ve decided to nap instead.
  • A ‘cancel for any reason’ policy is usually 40% to 50% more expensive than a standard ‘named-perils’ policy, depending on various factors, such as the trip cost and your state of residence.
  • Normally, ‘cancel for any reason’ insurance costs between 10% and 12% of the value of your trip.

There are other things to consider when buying a policy and including ‘cancel for any reason’. Costs and coverage varies and some Travel Insurance companies have been cutting back or reducing their coverage amid the pandemic. ‘Cancel for any reason’ coverage does not come standard on all travel protection plans. If you select the ‘cancel for any reason’ coverage, you must purchase the policy within typically 14 days of placing your initial vacation deposit. If you wait, you will not be eligible. Perhaps the biggest thing to remember is you will not receive a 100% reimbursement. (see bullet points above) There are rules to follow, like cancelling 48 – 72 hours prior to your scheduled departure, filing a claim and providing the Travel Insurance company with required documentation. And finally, be aware that by accepting a credit or voucher from the cruise line or tour operator, you can no longer make a claim against the travel insurance policy for that same money. If you accept a partial credit, you may be eligible for a partial reimbursement. (Check the policy requirements)

What Should You Look For In Travel Insurance?

Baggage and travel delay coverage. At the very least, you should have travel and baggage delay coverage. Let’s face it, flights are delayed frequently. If you are traveling on a time sensitive schedule, you need this coverage. Most Travel Insurance companies will kick in travel delay coverage if your flight is delayed at least 3 hours or more. (This varies with Travel Insurance companies.) Airline compensation for travel delay is usually nothing. And their compensation for baggage delay is very limited and typically isolated to finding your lost bags. They are not required to bring your bags to you, although some will. Baggage Delay coverage is intended to provide for the essentials until your bags can be located and returned to you. This coverage starts when your bags are delayed a certain number of hours (as stated in the policy) and any compensation you receive from the airline will be deducted. Also included with Baggage and Travel delay coverage would be baggage loss/damage reimbursement, missed connection or trip/travel delay dollar reimbursement.

Serious illnesses and severe weather. A good travel insurance policy can provide coverage if you get sick or injured, and if serious enough that could cause your trip to be canceled. A good policy will also provide reimbursements for expenses incurred during a lengthy delay. Trip Interruption reimbursement typically includes sickness and/or injury, being called back to active military duty, or a named hurricane that destroys your residence or destination. (There are time limit requirements for named hurricanes, see your policy)  Trip Cancellation generally includes (as outlined in your policy) sickness or injury, either being involuntarily removed from your job or being required to work, natural disasters such as fire that makes your primary residence or your destination uninhabitable.

Travel medical expenses and Emergency medical evacuation. Travel medical expenses will reimburse you for reasonable costs of medical expenses you incur should you get sick or injured. This can include prescription medication, a hospital stay or doctor visit. Emergency medical evacuation coverage pays transportation costs to move you to a place with adequate care, along with other benefits. This alone can save you hundreds if not thousands of dollars.

Coverage for pre-existing medical conditions. This covers costs if you have to cancel or interrupt your trip. You must be able to travel freely upon purchasing the policy and the policy must be purchased within 14 days of your initial trip deposit.

Do you need to purchase a travel insurance policy if you’re driving to see relatives? No, travel insurance doesn’t cover accommodations at Grandma’s house. There is a good chance your existing insurance coverages like your auto, home and medical insurance will cover these trips. Travelers that are paying for airfare, car rental and hotel expenses, along with cruise or tour vacations, should purchase travel insurance plans designed for their specific needs.

Tips for Finding the Best Travel Insurance:

Talk to an Expert. When you are working with your Travel Advisor, the subject of Travel Insurance will come up. Feel free to ask questions and get recommendations that are right for you. While Travel Advisor’s are not Insurance Agents, we know the basics of the policies we recommend. You will be encouraged to consult directly with the insurance company for in-depth questions to help you choose the best policy.

What do you need from a Travel Insurance Policy? You may be covered traveling domestically with your health insurance, car rental coverage through either your auto insurance policy or through your credit card you will be using, and lost luggage and medical evacuation with the credit card. It is imperative to contact each provider to ensure you are covered and to what extent. Please note, none of these will apply to International Travel. It is important to determine your needs for your destination.

Do Your Homework. Your Travel Advisor will recommend Travel Insurance providers that are Preferred Suppliers, meaning they are trustworthy and maintain good reputations of treating clients with respect and integrity. You should feel free to explore and review for your peace of mind before purchasing the policy.

Purchasing the Policy when Paying Your Trip Deposit. Your Travel Advisor will highly recommend this as most travel insurance policies require that you buy your policy within 14 days of your initial trip deposit. This will ensure you get any pre-existing conditions included (provided you comply with the able to travel at time of purchase clause) and if you choose to include ‘cancel for any reason’ that will be covered as well.

Above all, elect to purchase Travel Insurance to protect you and your vacation investment. Suppliers have their own travel insurance coverage that you can consider along with the Third Party Insurance we have discussed here. The bottom line is to protect your vacation with the policy that works best for you.