Standard Insurance Coverage vs. Cancel for Any Reason Policies
Cruise ship in stormy weather (Photo: Dennis van de Water/Shutterstock.com)
Under standard cancellation coverage, you can't cancel due to travel advisories from the CDC or any other governmental agency without losing your deposits. You can't cancel because the cruise line changed the itinerary, leaving off your dream destination. You can't cancel for fear of terrorism, worries about California wildfires or concerns about volcanic eruptions near your destination.
But a CFAR policy allows you to cancel a cruise and any associated prepaid activities for whatever reason you choose. Here are some instances when these flexible policies are best:
Known or foreseen events: Travel insurance is meant to cover unexpected events. Standard policies you purchased before an event occurs or becomes widely known will remain intact. Your insurance will provide benefits for cancellations, but still only for normally covered reasons, not because you don't like the travel conditions after the event begins. A cancel for any reason plan would let you back out of your travel plans and get some money back because you no longer want to travel under the new conditions.
The burden is on you to educate yourself on things like terrorism, tropical storms and disease outbreaks affecting your intended vacation destination. If you choose to purchase standard coverage after an event becomes "known" -- regardless of whether you knew about the situation or not -- your benefits would be severely limited, making that travel insurance policy almost useless.
In those cases, a CFAR policy may be the only option that allows you to purchase coverage related to your hesitation to travel during the event, while giving you the option of canceling your cruise without losing your prepaid, nonrefundable expenses. Read the fine print of any policy you're considering as restrictions may apply.
Fear: Standard insurance only covers incidents where you are directly affected by an adverse event. The only coverage available for worries and concerns before you travel is a cancel for any reason add-on.
For example, if you are injured, displaced or in any way affected by an act of terrorism, standard coverage will provide benefits as dictated by the terms of your policy. However, you can't use your fear of traveling to a destination that has been recently affected by an attack to cancel under a standard policy.
Only a CFAR policy purchased within the appropriate time constraints (see the section on terms and pricing below) before travel will allow you to cancel because of fear.
Hurricanes and storms: The naming of hurricanes is the key differentiating point for when a storm becomes a foreseen event. You can book a cruise and buy standard insurance coverage for travel during peak cruise hurricane season and be covered for cancellations caused by hurricanes that develop and are named after you purchase your policy. But if you book a cruise and buy a standard policy after a hurricane has been named, your coverage for anything related to that hurricane is nil.
And lest you think you don't have to worry since you don't live near a coast affected by hurricanes, named winter storms are essentially the same; once it has a name, your coverage for it ceases on most standard policies.
So why purchase a CFAR policy for storms if they are covered by standard policies, especially when cruise ships affected by them may cancel or reroute as needed? If the cruise line cancels, a standard policy may cover any expenses you chose to insure at the time of purchase, including transportation to and from your departure port.
But a CFAR upgrade allows you to cancel if you simply don't like an itinerary change offered by the cruise line. It can give you piece of mind, knowing that you are in control of your travel decisions, rather than waiting to see if the cruise line is going to cancel the cruise or delay embarkation.
Example: When hurricane Harvey caused extensive flooding in Houston, cruise lines were making decisions about upcoming cruises from the port at the last minute, leaving many people in limbo about whether their cruise would take place and if they should still board flights to Houston. A CFAR policy would have allowed those people to rearrange their travel plans as needed without waiting on the cruise lines -- possibly even booking a replacement cruise from an alternate port.
Disease outbreaks: As with major weather events, insurance companies will not pay claims on standard policies for cancellations related to a major disease outbreak that is a "known event," even if the CDC or another official agency issues travel warnings. Only a CFAR upgrade allows you to cancel at your discretion.
The caveat with a disease outbreak is that even a policy you purchase with a CFAR add-on may provide limited coverage for trip interruption (think missed ports, extended trips because of delayed docking or even quarantines). That's because these policies only change the terms of canceling your trip before it starts, not events that take place while you're traveling.
A spokesperson for travel insurance comparison shopping site SquareMouth says that during a known event, a cruise line canceling your cruise due to that event may not be a covered reason for canceling the remainder of your travel plans on a standard policy purchased after the event began. And only "certain (standard) policies provide coverage for related delays due to a cruise line's itinerary changes (that might leave you stranded mid-cruise)."
That means that even though standard coverage outside of known events would typically cover all expenses related to a canceled cruise, it likely will not during a widespread disease outbreak. It's one reason why SquareMouth recommends only cancel-for-any-reason policies during extended periods of travel uncertainty.
Changing your mind: In general, a standard travel insurance policy will only reimburse you for trip cancellations that fall under a covered category. You can't simply change your mind about going on a trip, regardless of whether that decision is logical or whimsical. However, even without a known event in place, a CFAR add-on covers you should you decide you don't want to travel after nonrefundable portions of your trip have been paid.
