Concerned about illness or an unforeseen event, many vacationers buy cancel-for-any-reason travel insurance when booking an expensive trip. Such coverage is costly and often unnecessary, a travel insurance expert says.
Cancel-for-any-reason (CFAR) insurance is an optional upgrade for travelers who buy trip-cancellation insurance, says Jenna Hummer, the public relations director for Squaremouth, an online travel insurance marketplace. The most common cancellation reasons, however, are covered by the basic trip-cancellation policies, she says.
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“CFAR is only useful if you’re worried about having to cancel your trip for a specific reason not covered by your trip-cancellation benefit,” Hummer says. “Such reasons are a border closure at your destination, fear of traveling to your destination and loss of enjoyment at your destination because of closed beaches, gross weather or a changed itinerary.”
The No. 1 reason for trip cancellations is death or illness of the insured traveler, she says. The second-most prevalent reason is death or illness of a family member, and the No. 3 reason is death or illness of a traveling companion.
In 2024, according to Squaremouth data, the average cost of a trip-cancellation policy was $404. Policies with the additional CFAR benefit had an average cost of $633, a 57% increase over the basic trip-cancellation policy.
“This percent increase varies from policy to policy, depending on the provider,” Hummer says. “The benefit comes at an added cost due to the increased risk to the insurance provider and the added peace of mind for travelers who want the flexibility to cancel no matter what and still recoup part of their costs.”
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