The impact of COVID-19 has highlighted the importance of travel insurance for many doubtful travelers, and recent events may have further underscored the necessity of Cancel for Any Reason (CFAR) plans.
In the past three weeks, travel consultants across North America have faced an array of logistical challenges: cartel blockades in Puerto Vallarta leaving passengers stranded and cutting off airport access; ongoing jet fuel shortages in Cuba resulting in flight cancellations; and, most recently, escalating tensions in the Middle East leading to abrupt airspace closures.
This week, numerous travelers came to terms with the fact that traditional travel insurance policies do not encompass the modifications they wish or are compelled to make due to these circumstances.
“There are various situations that are not covered by travel insurance, and many of those are currently occurring. For instance, war is excluded, and for those whose trips are headed to the Middle East, cancellations are a genuine concern,” insuranceQuotes.com analyst Michael Giusti conveyed to TMR this week.
It’s not merely that the circumstances themselves may lack coverage; even when these situations don’t directly affect a specific itinerary, they introduce a “Grey Area” of anxiety. Clients frequently wish to alter or terminate their plans based on their own perceptions—whether accurate or not—of current events and their locations.
“Fears surrounding travel aren’t insured either, and there are indeed some frightening occurrences worldwide that might cause hesitation before boarding an aircraft,” Giusti further remarked.
The “Rationale” for the Upgrade
This is where CFAR plans come into play. Although CFAR plans typically come with a higher price tag and cover a lesser percentage of the journey compared to a conventional policy, they provide the only real safeguard in situations like these.
“A typical travel insurance policy does not account for travel anxieties or worries regarding a destination,” Dean Sivley, President of Berkshire Hathaway Travel Protection (BHTP), informed TMR. “That’s the reason some travelers opt to include CFAR coverage with a standard travel insurance plan—to safeguard a fraction of their non-refundable trip deposits should they decide to cancel for any reason.”
Daniel Durazo, Director of External Communications at Allianz Partners, echoed this sentiment to TMR, noting that “logistical challenges” such as the fuel shortages in Cuba or the blockades in Mexico rarely qualify as “covered reasons” under a conventional policy. However, Allianz’s “Cancel Anytime” product serves a function similar to CFAR, permitting customers to cancel for any non-covered reason—even as late as the day of their journey.
“Our Cancel Anytime product enables our customers to withdraw from their trip right up to the day of departure, provided they have not yet left for their trip,” Durazo stated.
The Cost of Assurance
Travelers are essentially enhancing their insurance, akin to upgrading their cabin class or room accommodation. While standard insurance premiums usually range from 4% to 10% of the overall trip cost, choosing to bundle with a CFAR upgrade typically adds a 40% to 50% increase to that base cost. Overall, a traveler may find themselves paying approximately 7% to 12% of the total non-refundable trip expenses.
It’s a cost for reassurance, and it’s not something that travelers are hesitating to pay anymore—particularly among younger generations. Sivley’s team at BHTP recently reported that Gen Z is leading the way in terms of insurance uptake. BHTP’s 2025/2026 “State of Travel Insurance” study revealed that the intent to purchase travel insurance within Gen Z surged by 24% from the previous year. This is the only demographic projected to increase spending on travel in 2026 (with an average of over $11,000 per trip), and they are the most inclined to pursue the “flexibility” offered by CFAR to secure their investments.
Giusti also conveyed to TMR that travelers are recognizing that “this is perhaps the optimal moment to consider Cancel for Any Reason insurance that I have observed in quite some time.”
CFAR Saves Advisors Time, Too
This adaptability is also vital when managing geopolitical incidents, which are notoriously convoluted, and obtaining necessary documentation (such as an airline letter confirming a fuel scarcity) can be incredibly difficult.
“With CFAR, claimants are not obligated to provide proof of the rationale for cancellation since it’s precisely what it says: cancel for any reason coverage,” Sivley added.
This represents a significant efficiency gain for the advisor. Rather than investing hours acting as a claims mediator, attempting to gather documentation for a “Grey Area” event, the CFAR policy affords a straightforward, well-documented route to reimbursement.
Fonte: Travel Market Report
