Article written by Angela Borden, Seven Corners Product Marketing Strategist.

---

Throughout the last few years, the significant changes in travel have continued to make people wary of booking a trip. The ongoing effects and uncertainties of the COVID-19 pandemic and new variants remain, as well as the war abroad and fears it could spread. As the world continues to remain in a state of flux when it comes to travel, how can travelers protect not only themselves but also their wallets?

The travel insurance industry offers protection plans to allow cancellation or interruption of travel for any reason not otherwise covered: Cancel for Any Reason (CFAR) and a newer benefit, Interruption for Any Reason (IFAR). Seven Corners, a global travel insurance company, offers both coverage options, and not all leading travel insurance providers do. Our team has experienced an increase in calls asking about CFAR and IFAR as well as an increase in the popularity of these options. In fact, we saw a 180 percent increase in the sale of plans with CFAR in 2020 compared to 2019, and consumers are still showing interest in CFAR due to the continued uncertain nature of travel.

Due to the questions about these coverage options and the benefits they provide travelers during unforeseen circumstances, our team put together information on what CFAR and IFAR are, what they cover, and how adding these options might be useful when preparing for your next trip.

What Is CFAR?

CFAR is an optional benefit offered on certain trip protection plans that allows travelers to cancel trips for any reason not otherwise covered. It allows customers to be reimbursed for up to 75 percent of their nonrefundable trip costs as long as the CFAR benefit is purchased within 20 days of the initial trip deposit. To have CFAR 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 on a cruise, the excursion must also be insured 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 the failure of the travel supplier to provide the travel arrangements due to cessation of operations for any reason.

Why Was CFAR Added to Coverage Plans?

CFAR was designed for travelers to cancel their trip for any reason they wish, not because a travel supplier causes them to cancel. Here are a few examples of situations where CFAR might help:

-Your pet becomes ill, and you want to cancel the trip and stay home.

-You have a falling out with a friend and no longer want to vacation with them.

-You have an unexpected financial crisis and no longer want to travel.

-You are fearful of contracting a new variant of COVID-19 at your destination.

Additionally, if a traveler wants the option to cancel their trip because of the current war in Ukraine, they could utilize CFAR, the only option available to obtain coverage for cancellations due to war. Their reason for canceling a trip could include, but is not limited to, fear of travel due to the war. Travelers should review the plan document for their state of residence for the requirements to purchase and make a CFAR claim.

What Is IFAR?

IFAR is an important option for coverage plans in today's travel climate as it gives travelers the option to interrupt their trip once it has already begun. It is an optional benefit that reimburses travelers for up to 75 percent of their nonrefundable insured trip cost for unused, prepaid nonrefundable trip expenses. It can also cover additional transportation costs to join a trip if a traveler leaves after their scheduled departure date, rejoins their trip from the point they interrupted it to the next scheduled destination or travels to their originally scheduled return or final trip destination.

There are several requirements for IFAR, as it expands coverage for trip interruption beyond the list of covered reasons. For example, IFAR is not typically available if the trip is not more than two days, as travelers must interrupt their trip 48 hours or more after their scheduled departure date. Additionally, travelers must buy IFAR within the stated time; this is typically within 20 days of the date the initial trip deposit was made. The availability of optional benefits like IFAR is one of the many reasons it's important to buy travel insurance as soon as possible after the first trip payment or deposit is made.

IFAR does not cover penalties associated with travel arrangements not provided by the travel supplier for the trip and failure of the travel supplier to provide the agreed upon arrangements for the trip for any reason. The benefit was designed to interrupt a trip for any reason the traveler wishes, not because a travel supplier failed to fulfill their agreement.

To date, we have seen a strong adoption rate for the newer benefit of IFAR, with a little more than 17 percent of direct consumers choosing to add it to their purchase. Generationally, our team sees that IFAR is most popular with millennials and Generation X, each having adoption rates of 26 percent and 28 percent, respectively. The addition is least popular with baby boomers, who have an adoption rate of only 12 percent.

Why Was IFAR Added to Coverage Plans?

IFAR was added to Seven Corners' plans to provide improved coverage for customers in response to unpredictable events that can affect travel plans the way COVID-19 did. Examples for when IFAR might be helpful include:

-You are not comfortable with the steps your resort is taking regarding COVID-19, and you don't feel comfortable staying there, so you decide to return 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 go to your next destination early.

-You have a falling out with a friend with whom you are traveling and want to come home early.

-You have an unexpected financial crisis and want to go home early.

Additionally, if a traveler wants the option to interrupt their trip because of the current war in Ukraine, they could utilize IFAR, the only way to secure coverage for interruptions due to war. Their reason for interrupting a trip could include, but is not limited to, fear of travel due to the war. As with CFAR, travelers should review the plan document for their state of residence for the requirements to purchase and make an IFAR claim.

What Is the Difference Between IFAR and CFAR?

You should add CFAR to travel plans if you could potentially cancel your trip before you've departed, and CFAR typically requires you to cancel 48 hours or more before your scheduled departure date. IFAR comes into play after you've already departed on your trip but no sooner than 48 hours after departure.

What Is the Cost of CFAR and IFAR?

Travelers can expect most CFAR benefits to increase trip insurance costs by 40 percent to 50 percent because the plan now includes much wider coverage for trip cancellation. IFAR is a much less expensive option, increasing the price of a trip protection plan by 10 percent or less when added. With CFAR and IFAR, travelers can cancel or interrupt their travel plans for any reason they wish. The increase in price occurs because the insurance company now bears an increased risk.

Both CFAR and IFAR are beneficial travel insurance options for concerned travelers. With these flexible travel insurance benefits, travelers have a way to expand coverage for unanticipated cancellations or interruptions that could affect travel plans.

---

For the latest travel news, updates and deals, subscribe to the daily TravelPulse newsletter.

Topics From This Article to Explore