This coverage provides up to 100% of your total trip costs if you have to cancel your trip for any reason not listed in the standard coverage.
Let us tell you a story
Madeline and her friends from college had long planned a tour of the pyramids and monuments of Egypt. On Madeline’s 50th birthday, they decided the time had come. So they scheduled flights into Cairo and purchased a package tour.
Just three weeks before their scheduled departure, however, news of political unrest and reports of rioting, looting, and gunfire flashed across their televisions. The U.S. State Department orders non essential personnel and their families to leave the country. Trip cancellation coverage does not apply to situations of political unrest, but having ‘cancel for any reason’ coverage on their travel policies meant that Madeline and her friends could recover their costs and wait for a safer time to travel.
What does ‘Cancel for any reason’ cover?
This coverage provides reimbursement (up to the covered amount) for non refundable trip payments and pre-paid trip deposits if you have to cancel your trip for any reason not covered under the trip cancellation benefit.
This benefit is separate and different from trip cancellation coverage. ‘Cancel for any reason’ coverage is considered a ‘fail-safe’ by many travel insurance buyers who worry they may have to cancel their trip for a reason that is not covered by trip cancellation coverage and want to recover at least a portion of their expenses.
Understanding Cancellation Penalties
Coverage amounts vary from 50-100% depending on the plan and, in some cases, are subject to cancellation penalties. A cancellation penalty is the amount the travel supplier will not refund you if you have to cancel. The cancellation penalty determines the percentage that travel insurance will reimburse less the amount refunded by your travel supplier.
Using the above story as our example:
- Madeline’s trip cost $5,000 and tour operator imposes a 50% cancellation penalty if the cancellation occurs no less than two weeks prior to departure.
- Madeline cancels and is penalized 50%, or $2,500, by the tour operator who agrees to refund half her trip cost.
- Madeline’s travel insurance penalty schedule provides 90% reimbursement if the penalty amount is up to 50% of the trip cost.
Thanks to her ‘cancel for any reason’ coverage, Madeline’s reimbursement looks like this:
Total trip cost | $5,000 |
Subtract amount penalized by travel supplier (50%) | – $2,500 |
Amount covered by ‘Cancel for any reason’ (90% of penalty amount) | – $2,250 |
Madeline loses only | $250 |
Important notes about this coverage
- ‘Cancel for any reason’ coverage may be included with trip cancellation coverage or it may be a selectable option that has to be added to a policy (for an additional fee).
- This coverage requires purchase within a certain number of days of making your initial trip deposit (see table below).
- The cancellation must occur not less than a defined number of days or hours prior to the scheduled trip departure (see table below).
- You must insure 100% of all pre-paid travel arrangements that are subject to cancellation penalties or restrictions by the travel supplier.
- A few plans have maximum per-person trip cost limits. Specifically, CSA’s Custom Luxe plan limits the per-person trip amount to $10,000.
- Any amounts that are refunded by the travel supplier will be deducted from the amount refunded by your travel insurance plan.
What type of policy covers this?
This coverage is exclusively provided in package plans, and not medical plans; in addition, it’s usually an optional coverage that must be selected and added to your travel insurance policy (for an additional fee). Not all travel insurance plans offer this coverage option.
A few plans include ‘cancel for any reason’ automatically:
- The Elite plan by Travel Insurance Services
- The Travel Max plan by Travelex
- The Premier plan by TravelSafe
How much coverage does each company provide?
Policy | Company | If purchased within * | Policy limit ** | Penalty schedule | Cancel within |
---|---|---|---|---|---|
No coverage | Allianz | ||||
Custom Luxe | CSA | 24 hours | 75% | 48 hours | |
No coverage | FrontierMEDEX | ||||
Global Alert Preferred | Global Alert | 15 days | 75-100% of loss | See penalty schedule | 2 days |
Global Alert Preferred Plus | Global Alert | 15 days | 90-100% of loss | See penalty schedule | 2 days |
No coverage | Global Underwriters | ||||
No coverage | HTH Worldwide | ||||
Advantage Asset | MH Ross | 15 days | 75% of loss | No penalty schedule | 2 days |
Advantage Complete | MH Ross | 15 days | 90-100% of loss | See penalty schedule | 2 days |
Advantage Bridge | MH Ross | 15 days | 80-100% of loss | See penalty schedule | 2 days |
RoundTrip Choice | Seven Corners | 10 days | 75% of loss | No penalty schedule | 2 days |
Travel Select Advantage | Travelex | 21 days | 60% of loss | No penalty schedule | 48 hours |
Travel Lite *** | Travelex | 21 days | 95% of loss | No penalty schedule | 48 hours |
Travel Select | Travelex | 21 days | 60% of loss | No penalty schedule | 48 hours |
Travel Max | Travelex | 30 days | 50% of loss | No penalty schedule | 48 hours |
Business Traveler *** | Travelex | 80% of loss | No penalty schedule | 48 hours | |
Travel Plus *** | Travelex | 21 days | 95% of loss | No penalty schedule | 48 hours |
Tee, Tour, and Travel | Travel Guard | 15 days | 50% of loss | No penalty schedule | 2 days |
My Travel Guard | Travel Guard | 21-30 days | 50-75% of loss | No penalty schedule | 2 days |
Sportsman's Travel | Travel Guard | 15 days | 50% of loss | No penalty schedule | 2 days |
Adventure Travel | Travel Guard | 15 days | 50% of loss | No penalty schedule | 2 days |
Platinum | Travel Guard | 15 days | 70% of loss | No penalty schedule | 2 days |
Gold | Travel Guard | 15 days | 50% of loss | No penalty schedule | 2 days |
Select Plus | Travel Insurance Services | 15 days | 75% of loss | No penalty schedule | 2 days |
Select Elite | Travel Insurance Services | 21 days | 75% of loss | No penalty schedule | 2 days |
Select Basic | Travel Insurance Services | 15 days | 75% of loss | No penalty schedule | 2 days |
Worldwide Trip Protector | Travel Insured | 21 days | 75% of loss | No penalty schedule | 48 hours |
Worldwide Trip Protector Gold | Travel Insured | 30 days | 75% of loss | No penalty schedule | 48 hours |
Vacation Classic | TravelSafe | 15 days | 75-100% of loss | See penalty schedule | 2 days |
* If purchased within the specified amount of time after the initial trip deposit.
** Subject to cancellation penalty schedule
*** Optional coverage
Summary
- Considered by many travelers as a ‘fail-safe’ if they have to cancel for a non covered reason
- 100% of pre-paid travel arrangements that are subject to cancellation penalties must be insured
- Some plan benefit are subject to cancellation penalty schedules
- The cancellation must occur not less than the number of days defined in the policy