Trip Cancellation Insurance Is a Must-Have
“Trip cancellation has always been the primary driver of travel insurance purchases,” says Moncrief. “We’ve seen this number range from 80% to 90% of our sales, but never this high.”
Trip cancellation insurance reimburses the prepaid and non-refundable costs for your trip if you’re unable to travel due to an unforeseen circumstance. “Unforeseen circumstances” typically include serious injuries, natural disasters, death of you or a traveling companion, severe weather that makes a travel service unable to operate.
Generally, travel insurance companies consider pandemics a foreseeable event. But many travel insurance companies sell policies with Covid-related coverage, which makes trip cancellation a must buy. Ninety-five percent of travel insurance policies for trips in 2021 include trip cancellation coverage, according to Squaremouth.
Changing Travel Rules Boost Need for Cancel for Any Reason Coverage
There has been a 42% increase in cancel for any reason (CFAR) coverage for U.S. travelers booking international trips, according to Squaremouth.
Cancel for any reason coverage works like the name implies: You can cancel your trip no matter the reason, whether it’s Covid-related or you’d just prefer to spend a weekend working on a landscaping project.
CFAR coverage isn’t only for international travelers—it can be valuable coverage for anyone who wants the most flexibility to cancel a trip and get a portion of nonrefundable trip expenses reimbursed, no matter where you’re going.
The new CDC rule applies to air travel—and all American citizens—but not land border crossings.
If a rule like that changes your mind about taking a planned trip, CFAR coverage is your way out.
You typically need to buy cancel for any reason coverage within 14 to 21 days of your first trip payment. And this coverage does come with some restrictions. For example, you might have to cancel the trip within 48 hours of departure in order to make a CFAR claim, meaning you can’t cancel at the last minute.
While this coverage will increase the price of your travel insurance policy by about 40%, it’s become a popular option during Covid-19. Squaremouth has seen an increase of over 200% for cancel for any reason coverage for trips being booked for 2021.
Read the full Forbes article online here: https://www.forbes.com/advisor/travel-insurance/april-trends/