Thinking of cancelling your trip? Here’s how ‘Any Reason’ insurance really works

Being stranded in a foreign country is a situation no one wants to find themselves in. However, with recent events unfolding in the Middle East, thousands of Aussies are currently either stuck in-transit, stuck on holiday or facing cancelled flights—with no certainty as to whether they’re able to get home or start their trip.

Considering the Middle East is a major gateway for Aussies travelling to and from popular destinations, and with the peak European summer period just around the corner, the financial implications of cancelling your trip will have many travellers watching nervously.

But can travel insurance help soften the financial blow if you decide it’s too tricky a time to travel? Before signing up for a policy, here’s everything to know about Cancel for Any Reason travel insurance—and whether or not it’s all it’s cracked up to be.

What is Cancel for Any Reason travel cover?

Travel insurance will have a list of circumstances where you’ll have coverage if your trip is cancelled, such as illness, family emergencies and some weather events. Depending on your insurer and the policy you choose, some events and circumstances won’t be included in your cover, and some insurers do not allow for simple ‘change of mind’ cancellations.

This is where Cancel for Any Reason (CFAR) cover may fill the gap. Offered as an add-on to your travel insurance plan (which you’ll typically need to add on at the time of sign up or within a certain time frame), CFAR may reimburse you for cancelling your travel for ‘any’ reason, provided cancellation is made typically 48 hours before departure at least.

This could be as simple as changing your mind about the destination, maybe an event that was the main reason for your travel not going ahead, a clash at work or at home, or perhaps your child or pet care arrangements have fallen through.

But don’t take ‘any’ at face value. CFAR cover often comes with strict conditions, payout limits and timing rules. Before you add it to your policy, it pays to check exactly what’s covered — and how much you’d actually get back.

Cancel for Any Reason cover: What to be aware of

1. Travelling to ‘Do Not Travel’ areas won’t have coverage

Any place where the Australian Government has a ‘Level 4 – Do not travel’ restriction in place won’t have travel insurance coverage.

Some insurers may offer some coverage if your destination is upgraded to a Level 4 while you’re already in that destination (provided you try to leave as soon as possible after the upgraded warning). You may also be covered if the change of status occurs after you’ve booked your trip and purchased your travel insurance but before you’ve travelled.

2. Any Reason does not actually cover ‘any’ reason

Even with convincing wording like ‘any reason’, there’s still a lot of exclusions with Cancel for Any Reason cover. Much like standard travel insurance coverage, this may include instances of war or unrest, terrorism incidents, military action, pandemic, epidemic and more.

To summarise, cancelling your trip due to one such emergency won’t be part of that ‘any’ reason.

3. Stopover destinations may need to be included in coverage

Some insurers might require you to list all countries you’re visiting, including any stopovers that you’re making, even if it’s just a short transfer from one flight to the other. The Smarttraveller website recommends listing stopover destinations in your insurance application, although some insurers may already specify this when applying for cover, it’s always best to check the policy and get in touch with the insurer before signing up if you have concerns.

4. Cancel for Any Reason cover is an add-on

CFAR coverage is offered by some insurers as an add-on to a standard travel insurance policy. This also means that you’ll be required to add it to your policy at time of sign up or within a certain timeframe. You can’t simply add it on at a later date when you’re considering changing your travel plans.

5. Can be a costly addition to your insurance

As it’s often included as an optional extra by some insurers, adding on this type of extra coverage is going to come with an additional cost. This will vary between insurers, but you’ll need to weigh up the extra cost to see if it’s worth adding on to your insurance and if it fits your budget.

The bottom line? Cancel for Any Reason cover can offer extra flexibility, but it’s far from unlimited. It won’t override government ‘Do Not Travel’ warnings, it won’t cover every global event, and it often comes with payout caps, strict timeframes and added costs.

Before you buy — and before you travel— read the Product Disclosure Statement (PDS) carefully, check exactly how much you’d be reimbursed, confirm all destinations (including stopovers) are listed, and make sure the added premium stacks up for your situation. A few minutes of checking upfront could save you a costly surprise if you do need to cancel.