Travel Insurance FAQ

Trip Cancellation vs. Cancel for Any Reason – What’s the Difference?

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One of the most popular reasons travelers purchase travel insurance is to obtain trip cancellation coverage, so they can be reimbursed if they can’t go on their trip. However, many travelers also make the mistake of spending too much for “Cancel For Any Reason” coverage when it is not necessary.

There are several factors that distinguish these two separate benefits. Here are the most important differences:

1. Cancel For Any Reason coverage can increase a policy’s premium by about 40%. This benefit allows travelers to cancel their trip without providing a reason, but won’t reimburse 100% of trip costs. Reimbursement under Cancel For Any Reason is typically either 50% or 75%.

2. Aside from not reimbursing 100% of trip costs, there are a couple of other stipulations that come along with the Cancel For Any Reason benefit. Travelers must insure all prepaid and non-refundable trip expenses, and they must cancel their trip at least 2-3 days before their departure date. Additionally, this benefit is time-sensitive and must be purchased within 14-30 days of the initial trip deposit.

3. Trip cancellation offers 100% reimbursement for prepaid and non-refundable expenses in the event a trip is cancelled for one of the covered reasons listed on the policy, such as illness or injury of a traveler, traveling companion or family member, hurricane or natural disaster, or a terrorist attack at their destination.

4. Trip Cancellation can be purchased any time up until the day before a traveler leaves for their trip, and often covers several of the potential issues a traveler is worried about.

Travelers should check policy details to determine the covered reasons for Trip Cancellation before resorting to spending extra on Cancel For Any Reason. While this benefit can provide useful coverage for travelers in specific circumstances, it is often an unnecessary expense.