What is Cancellation and Interruption for Any Reason coverage?
Article written by Angela Borden, product marketing strategist at Seven Corners.
Over the past few years, significant changes in travel have continued to make people reluctant to book travel. The lingering effects and uncertainties of the COVID-19 pandemic and new variants remain, along with war abroad and fears that it may spread. As the world continues to remain in a state of flux when it comes to travel, how can travelers not only protect themselves but also protect their wallets?
The travel insurance industry offers protection plans to allow for trip cancellation or interruption for any reason not otherwise covered: Cancellation For Any Reason (CFAR) and a newer benefit, Interruption For Any Reason ( IFAR). Seven Corners, a global travel insurance company, offers both coverage options, unlike all major travel insurance providers. Our team has seen an increase in calls requesting information about CFAR and IFAR as well as an increase in the popularity of these options. In fact, we saw a 180% increase in the sale of plans with CFAR in 2020 compared to 2019, and consumers are still showing interest in CFAR due to the still uncertain nature of travel.
Due to questions about these coverage options and the benefits they provide travelers during unforeseen circumstances, our team has put together information on what CFAR and IFAR are, what they cover, and how adding these options could be useful when planning your next trip.
What is CFAR?
CFAR is an optional benefit offered on some travel protection plans that allows travelers to cancel trips for any reason not otherwise covered. It allows customers to be reimbursed for up to 75% of their non-refundable travel expenses as long as the CFAR benefit is purchased within 20 days of the initial trip deposit. For CFAR to apply, travelers must also insure subsequent travel arrangements added to their trip within 15 days of the date they were purchased. For example, if a traveler decides to add an excursion to their itinerary while on a cruise, the excursion must also be provided within 15 days of the date the traveler pays for the excursion. It is important to note that CFAR does not cover travel arrangements that are not provided by the travel supplier or failure of the travel supplier to provide travel arrangements due to cessation of operations for any reason. .
Why was CFAR added to hedging plans?
CFAR was designed for travelers to cancel their trip for whatever reason they want, not because a travel provider is forcing them to cancel. Here are some examples of situations where CFAR could help:
—Your pet becomes ill and you want to cancel the trip and stay home.
—You are arguing with a friend and you don’t want to go on vacation with him anymore.
—You have an unexpected financial crisis and you no longer want to travel.
—You are concerned about contracting a new variant of COVID-19 at your destination.
Additionally, if a traveler wishes to have the option of canceling their trip due to the current war in Ukraine, they can use CFAR, the only option available to obtain coverage for war cancellations. Their reason for canceling a trip could include, but not be limited to, fear of traveling due to war. Travelers should consult the plan document for their state of residence for purchase requirements and to apply for CFAR.
What is IFAR?
IFAR is an important option for hedging plans in today’s travel climate, as it gives travelers the flexibility to end their trip once it has already begun. This is an optional benefit that reimburses travelers up to 75% of the cost of their non-refundable insured trip for unused prepaid, non-refundable travel expenses. It may also cover additional transportation costs to rejoin a trip if a traveler departs after their scheduled departure date, rejoins their trip from the point where they interrupted it to the next scheduled destination, or proceeds to their return destination. or final trip originally planned.
There are several requirements for IFAR as it extends travel interruption coverage beyond the list of covered reasons. For example, IFAR is generally not available if the trip does not last more than two days, because travelers must interrupt their trip 48 hours or more after their scheduled departure date. In addition, travelers must purchase IFAR within the specified time; this is usually within 20 days of the date the initial security deposit was made. The availability of optional benefits like IFAR is one of the many reasons why it is important to purchase travel insurance as soon as possible after the first travel payment or deposit.
IFAR does not cover penalties associated with travel arrangements not provided by the travel supplier for the trip and the failure of the travel supplier to provide the agreed arrangements for the trip for any reason. The benefit was designed to interrupt a trip for any reason desired by the traveler, not because a travel supplier failed to honor their agreement.
To date, we’ve seen strong adoption of the new IFAR benefit, with just over 17% of direct consumers choosing to add it to their purchase. Generationally, our team finds that IFAR is most popular with millennials and Gen Xers, each with adoption rates of 26% and 28%, respectively. The addition is less popular with baby boomers, who have an adoption rate of just 12%.
Why was IFAR added to hedging plans?
IFAR has been added to Seven Corners plans to provide better coverage for customers in response to unpredictable events that may affect travel plans as has COVID-19. Examples of situations where IFAR can be useful:
—You are not comfortable with your resort’s measures regarding COVID-19, and you don’t feel comfortable staying there, so you decide to go home early.
—Three days into the first leg of your trip, you have a disagreement with your host and want to leave, so you decide to get to your next destination early.
—You are arguing with a friend you are traveling with and want to get home early.
—You have an unexpected financial crisis and you want to go home early.
Moreover, if a traveler wishes to have the possibility of interrupting his trip due to the current war in Ukraine, he can use IFAR, the only way to guarantee coverage for interruptions due to war. Their reason for interrupting a trip could include, but is not limited to, fear of traveling due to war. As with CFAR, travelers should consult the plan document for their state of residence for IFAR purchase and claim requirements.
What is the difference between IFAR and CFAR?
You should add CFAR to travel plans if you can potentially cancel your trip before you depart, and CFAR generally requires you to cancel 48 hours or more before your scheduled departure date. IFAR comes into play once you have already left on the trip, but at the earliest 48 hours after departure.
What is the cost of CFAR and IFAR?
Travelers can expect most CFAR benefits to increase travel insurance costs by 40-50%, as the plan now includes much broader coverage in the event of trip cancellation. IFAR is a much cheaper option, increasing the price of a travel protection plan by 10% or less when added. With CFAR and IFAR, travelers can cancel or interrupt their travel plans for any reason they wish. The price increase occurs because the insurance company now bears an increased risk.
CFAR and IFAR are beneficial travel insurance options for concerned travellers. With these flexible travel insurance benefits, travelers have a way to extend coverage for unexpected cancellations or disruptions that may affect travel plans.
For more information on our round-trip plans and coverage for COVID-19, including quarantine coverage and other unforeseen circumstances, travelers can visit our website or speak to one of our agents. approved travel insurance. To learn more about how Seven Corners travel medical and travel protection products specifically address the ongoing impacts of the pandemic, visit our Coronavirus page. To find out more about Seven Corners offers related to the war in Ukraine, visit our travel alerts page covering the current war.