Trip Cancellation or Cancel For Any Reason – Which Should I Buy?
Both the standard Trip Cancellation benefit and the optional Cancel For Any Reason can offer coverage for travelers to cancel their trip. However, there are important differences between the two benefits that travelers should be aware of before spending the money on their travel insurance policy.
When to Buy Standard Trip Cancellation
Standard Trip Cancellation can reimburse travelers for 100% of their prepaid and non-refundable trip costs in the event they need to cancel their trip for a covered reason, such as an illness or injury, or severe weather. This is the most common reason traveler’s buy trip insurance.
If a traveler would like to purchase a policy with the Trip Cancellation benefit, they can choose to enter their trip cost when searching for available policies. They can include all, some, or none of their prepaid and non-refundable trip expenses, such as airfare, hotel accommodations, cruise reservations, tours, and excursions, among others.
The most important thing to note about Trip Cancellation is reimbursement is only available if a traveler is forced to cancel for a reason that is specifically listed by their policy. This includes the most common events that force travelers to cancel, including but not limited to the following:
- Illness, injury, or death of the traveler, a traveling companion, or a non-traveling family member
- Hurricane, severe weather, or natural disaster
- Terrorist attack
- Financial Default of a common carrier
- Employment Layoff
When to Pay More for the Cancel For Any Reason Upgrade
For travelers who have concerns that are not listed as covered within Trip Cancellation, the Cancel For Any Reason benefit may be their best option. This is an optional upgrade that partially reimburses travelers if their trip is canceled for a reason that is not otherwise covered by a policy.
In order for a traveler to be eligible for Cancel For Any reason, they must insure 100% of their prepaid and non-refundable trip costs, and typically must purchase their policy within 10-21 days of the traveler’s first payment towards their trip, such as the airfare or hotel reservations. However, there are select cruise only policies that offer Cancel For Any Reason anytime before a traveler has made their final trip payment.
To be covered under the Cancel For Any Reason benefit, a traveler must cancel their trip in its entirety at least 2 days before their scheduled departure date. In the event a traveler cancels their trip using the Cancel For Any Reason benefit, they can be reimbursed up to 75% of their insured trip cost, depending on the policy.
While Cancel For Any Reason can provide increased flexibility for travelers, it comes with a price. Adding the Cancel For Any Reason benefit to a policy typically increases the premium by roughly 40-50%. In 2020, the average cost of a policy with Cancel For Any Reason is $400. Overall, the average premium for a travel insurance policy in 2020 is $307. Due to this increase in price, Squaremouth only recommends this benefit for travelers who have a specific concern that cannot be covered.