Cancel For ANY Reason?

The last few years have brought a new feature to many travel insurance plans -- the ability to cancel your trip for ANY reason. And it's true, you really can cancel for any reason whatsoever although the amount of your losses that you will be able to recover can vary widely from plan to plan.

Here's a couple of examples of what you have to do in order to be eligible for the Cancel For Any Reason (CAR) coverage:

Cancel For Any Reason Benefit

If You cancel Your Trip for any reason not otherwise covered by this policy, We will reimburse You for the percentage of the unused non-refundable prepaid expenses for Travel Arrangements You paid for Your Trip as shown in the Cancellation Penalty Schedule shown below, provided:

1) Your payment for this plan is received within 21 days of Your initial deposit/payment for Your Trip;
2) You insure 100% of all prepaid Travel Arrangements that are subject to cancellation penalties or restrictions by the Travel Supplier;
3) You cancel Your Trip two (2) days or more before Your Scheduled Departure Date; and
4) Your Trip Cost is $15,000 or less.




Be advised that the Company requires the Insured to purchase Cancel for any Reason coverage within 30 days of their initial trip deposit. If after 30 days from initial trip deposit, this coverage is not available.

The Company will pay a benefit, up to the maximum shown on Your Confirmation of Benefits, if You are prevented from taking Your Trip for all reasons up to 48 hours prior to departure.

In no event shall the amount reimbursed exceed the lesser of the amount You prepaid for the Trip or the maximum benefit shown on Your Confirmation of Benefits.



Optional Cancel For Any Reason Benefit

If the Insured purchased the Optional Cancel for Any Reason Benefit and cancels his/her Covered Trip for any reason not otherwise covered by this plan, we will reimburse the Insured for the percentage of the prepaid, forfeited, non-refundable Payments or Deposits the Insured paid for his/her Trip provided:

1. the Insured's payment for this plan is received within 24 hours of the date the Insured's initial deposit for his/her Covered Trip is received; and
2. the Insured is not disabled from travel at the time the Insured pays his/her premium; and
3. the Insured insures 100% of all prepaid Covered Trip costs that are subject to cancellation penalties or restrictions; and
4. the Covered Trip cost per person is no more than $10,000; and
5. the Insured cancels his/her Covered Trip 48 hours or more before his/her scheduled Covered Trip departure date.


As you can see, the requirements to be eligible for this coverage vary widely. You may have to buy your policy as quickly as 24 hours after making the first payment on the trip or up to 30 days following the first payment. Most, but not all will require you to insure 100% of your trip costs. If you're unsure as to what trip arrangements must be included in the insured trip cost be sure to call the insurer. You don't want to mistakenly void this coverage because you made some otherwise minor mistake. And the payout percentage also varies widely. Here's a couple of examples:

Cancel for Any Reason is subject to the following payment percentage relative to the applicable cancellation penalty:

Cancellation Penalty Schedule

If Cancellation Penalty Percentage of Penalty

Amount Is: Amount Payable Is:

Up to 25% of trip cost. . . . . . . . . . 100% of penalty amount

26% to 50% of trip cost . . . . . . . . 90% of penalty amount

51% to 75% of trip cost . . . . . . . . 80% of penalty amount

Over 76% of trip cost. . . . . . . 70% of penalty amount



Cancellation Penalty Schedule

If Cancellation Penalty Amount Is: Percentage of Penalty Amount Payable Is:
Up to 25% of Trip Cost 100% of Penalty Amount
26% to 50% of Trip Cost 85% of Penalty Amount
Over 50% of Trip Cost 75% of Penalty Amount

Other plans have a flat 75% payout regardless of the cancellation penalty amount situation. Be aware that for all of these plans if you cancel for a reason that is otherwise covered under the plan wording the payout schedules shown above do not apply -- you should be able to recover 100% of your loss up to the amount that you insure.

Also be aware that this coverage ends generally 48 hours prior to your scheduled departure. So if you're going right down to the wire on that 48 hour limit be sure that you can document exactly when you decided to cancel your trip. Your best bet is to do it in writing somehow -- email or fax or some other means that is timestamped so you can prove you complied with that 48 hour requirement.

Except for some of the premium plans that might have this as a standard benefit, for most plans it's optional and will cost you anywhere from an additional 40% to 60% over and above the plan's base premium. Combine that with the limited payback and you can see that you really have to want this coverage in order to justify the additional cost.

Many travel supplier plans have recently come out with some form of CAR benefit for their clients. The major difference is that the third-party plans will reimburse you with cash while the supplier plans will generally reimburse you with a credit or voucher that can only be used for a future trip. For example, this is from Royal Caribbean's Cruise Care plan:


CRUISECARE "ANY REASON" CRUISE CREDITS: Up To 75% of the non-refundable pre-paid Cruise Vacation Cost

Provided EXCLUSIVELY by Royal Caribbean International

In the event that you choose to cancel for a reason not authorized above or for a reason that is otherwise restricted, at any time up until departure, and you have purchased CruiseCare, Royal Caribbean International will provide you a cruise credit equal to 75% of the non-refundable value of your Cruise Vacation prepaid to Royal Caribbean International, for your use toward a future cruise. This additional enhancement is offered exclusively by Royal Caribbean International as a special service to guests that purchase this cruise ticket Cancellation Penalty Waiver Addendum.

Certain restrictions on the use of these cruise credits (such as blackout periods) may apply. Credits are valid for one year from issue date, are not transferable, and have no cash value. To be eligible for credits, notification of cancellation must be given to Royal Caribbean International prior to the ship's departure.

One nice feature is that this CAR coverage is offered at no additional cost as compared to the 40% to 60% extra premium you'll spend with a third-party insurer. How can they do this? The CAR coverage from Royal Caribbean (and most other travel suppliers) really isn't insurance. It's a Cancellation Fee Waiver -- you've paid them a certain amount for the coverage and in exchange they agree to waive their usual cancellation penalties and issue you a credit toward a future trip. You're a captive client now -- you can't use that voucher for any reason other than a future trip with them. And they have the additional advantage over third-party insurers of having a chance to re-sell that cabin you've cancelled so there's a very real chance that they're not going to lose any money. It's a good deal for everyone. Again, with almost all of these suplier plans if you have to cancel for a covered reason you're reimbursed for your loss with cash. It's only if you cancel for a reason not otherwise covered in the plan wording that you would receive the credit/voucher to be used for a future trip.

travel insurance basics