‘Cancel for Any Reason’ Travel Insurance Is on the Rise. Here’s What You Need to Know.

“At the start of 2025, CFAR was added to about 7 percent of policies,” Suzanne Morrow, InsureMyTrip CEO, tells me over email. “From January through August, the average rose slightly to 8 percent. A notable spike occurred in September, when travelers began booking holiday trips amid discussions of a potential government shutdown. Both seasonal travel planning and political uncertainty likely contributed to the increase in CFAR purchases.”

World Nomads has also seen an increase in CFAR plans for US residents since it launched in October 2024.

Unlike traditional trip-cancellation insurance, which reimburses travelers only for specific covered reasons, CFAR has much fewer restrictions. The optional add-on allows travelers to back out for personal or unpredictable reasons that are not included in a basic policy. It may apply when trip logistics fall apart, plans change unexpectedly, or a traveler simply no longer feels comfortable going.

A World Nomads representative notes that CFAR is a fit for expensive trips booked for in advance, have lots of non-refundable components, or when safety or travel warnings may come into play. Think an African safari, or Antarctica cruise — both trips that are typically booked many months in advance and require intricate planning.

Photo: rafa jodar/Shutterstock

CFAR isn’t a free for all. The plans have their own set of strict requirements. Travelers typically must purchase it shortly after their first trip payment (within seven days in the case of World Nomads, for example), insure all prepaid non-refundable expenses, and cancel at least two days before departure. That means no arriving to the airport late and deciding to cancel. Certain states have restrictions, too. For example, World Nomads offers CFAR at an additional cost to Explorer and Epic plans, but can’t offer CFAR benefits to New York residents.

Reimbursement is partial (usually 50 percent of costs on mid-tier plans and up to 75 percent on higher-end options), and the benefit is not available in every state. That makes the coverage best suited for itineraries with high up-front costs, multiple reservations, or long booking windows where uncertainty can build over time.

The claims can also cover the nonrefundable portion if an airline or tour operator issues waivers or credits when they cancel a booking.

Travel-insurance analysts note that the system is designed this way to prevent abuse. CFAR is intended as a hedge, not a substitute for standard travel protections, and its partial reimbursement is structured to keep premiums manageable.

The 48-hour requirement means that if you run into issues while you’re traveling, CFAR coverage doesn’t apply — including illness, emergency medical situations, weather, or missed connections. A standard travel insurance policy then kicks in, and isn’t hindered by any additional CFAR plans you added on. InsureMyTrip has another policy similar to CFAR to that covers travel already in motion: Interruption For Any Reason, or IFAR. This allows early return home for reasons not covered under standard interruption benefits.

Photo: AndTheyTravel/Shutterstock

Travelers also need to consider the price of the plan itself. Morrow says that CFAR plans can add 40 to 60 percent to the cost of a base travel insurance policy. So if a plan costs $100, it could be between $140 and $160 with CFAR.

“Every traveler is different and has different concerns,” Morrow says. “CFAR is most valuable for trips with high nonrefundable costs, complex itineraries, or uncertainty (e.g., political unrest or personal concerns). If flexibility is less critical and cancellation risk is low, travelers may prefer to save on the extra cost.”

CFAR is most valuable in situations where a traveler worries that personal risk tolerance might change before departure. That could mean anxiety about flying, budget concerns, shifts in global events, or fears that a shutdown could worsen and disrupt travel logistics.

According to Reuters, air traffic control staffing issues related to the government shutdown has caused delays in Dallas, Chicago, Atlanta, and Newark and more due to unscheduled staff absences by workers who are expected to do the job without receiving a paycheck. The AP also reported that longer security lines “could soon become a reality.”

This is happening at a time when air traffic controllers are already strained and airport chaos has become the new norm. Caleb Harmon-Marshall, who writes the influential Gate Access newsletter, wrote: “Each day this shutdown continues, travel will become a little more unsafe. This is all due to TSA officers’ inability to fully focus on their duties because they are worried about their livelihood.” He ended that post advising people that this is not the right tie to fly, and people with holiday plans should “prepare to drive or stay home.”

CFAR is a paid hedge for people who don’t want to be locked in when circumstances shift suddenly. In a year when federal operations are strained, staffing is uncertain, and flight disruptions make headlines seemingly every day, many travelers find that peace of mind worth the extra cost.