What is “Cancel For Any Reason” Travel Insurance?

Update: As of Friday 13 March 2020, Cover-More has suspended sales of its Cancel For Any Reason travel insurance add-on in Australia and New Zealand. This does not affect existing policies.

As the ongoing COVID-19 outbreak wreaks havoc on the travel industry, planning an overseas trip has become considerably more difficult. Many travel insurance providers will not cover claims relating to epidemics such as coronavirus, even for policies taken out before the outbreak. And almost no travel insurance will cover coronavirus claims for policies purchased after the outbreak became a known event. This happened in late January 2020.

It’s impossible to predict how long the outbreak – and associated flight cancellations and travel restrictions – will last. The whole thing could blow over in a matter of months, or it could take longer. At this point, we just don’t know for sure.

Taking out travel insurance is extremely important ahead of any overseas travel. Among many other reasons, you could be left thousands of dollars out of pocket if you pre-pay for things like hotels, flights and tours, and have to cancel.

Travel insurance typically covers cancellation expenses if you have to cancel for circumstances outside of your control, such as illness, natural disasters or if the Australian government changes its travel advice for your destination to “Do Not Travel”. This means you could still be covered if you had booked a trip to China or Iran before the advice level was changed.

But insurance may not cover your expenses if you choose to cancel a trip to other destinations, such as Indonesia, Japan or Italy, for personal reasons or due to coronavirus concerns. It may also not cover your medical expenses if you happen to contract COVID-19 while overseas.

Travel insurance will still cover other illnesses and injuries – and many other things that could go wrong on your trip. So, if you are travelling, it’s still a very good idea to purchase insurance.

Cancel-For-Any-Reason (CFAR) travel insurance

In Australia, Cover-More introduced Cancel-For-Any-Reason (CFAR) insurance in 2018. This travel insurance policy allows you to cancel your overseas trip – with various conditions. If you do cancel, you would be reimbursed for up to 75% of non-refundable expenses, up to a total of $10,000.

This is designed for travellers that cancel for reasons not generally covered by standard insurance policies, such as relationship breakups, changing jobs or passport and visa problems. However, as the name suggests, you may cancel your trip for any reason – including the coronavirus outbreak.

This type of policy is more expensive, and it still may not cover any medical expenses incurred if you were to contract the virus overseas. But it would allow you to book your trip with confidence and decide whether or not to travel closer to the departure date. With this Cover-More policy, you would need to purchase the cover within 48 hours of paying for your holiday and you must cancel your trip at least 2 days prior to departure.

Other than Cover-More, we are not aware of any other travel insurer in Australia to offer CFAR insurance.

How to purchase CFAR insurance from Cover-More

It is important to note that CFAR insurance is not available with Cover-More’s standard policies, and you cannot purchase it on the Cover-More website. Instead, you would need to purchase it as an add-on from various travel agents such as Flight Centre, Helloworld, independent travel agents or NRMA Insurance.

Refunds for unused travel insurance policies

If you’ve purchased travel insurance but are now unable to travel and have not made any claims on your policy, keep in mind that you may be able to get a refund for unused travel insurance.

Read more: Credit Card Travel Insurance May Not Cover Coronavirus

Matt Graham

The editor of Australian Frequent Flyer, Matt's passion for travel has taken him to over 70 countries… with the help of frequent flyer points, of course!
Matt's favourite destinations (so far) are Germany, Brazil & Kazakhstan. His interests include economics, aviation & foreign languages, and he has a soft spot for good food and red wine.

You can connect with Matt by posting on the Australian Frequent Flyer community forum and tagging @AFF Editor.