A non-cruise travel insurance question pertaining to CFAR

[OnTheJourney]

I'm planning a fly/drive trip for the fall. With the uncertainties of the recent covid escalation, I want to insure the cost of my flights. I want a CFAR policy and found one that would work well. A representative at a popular insurer website told me that besides the cost of the flights I have to insure ALL non-refundable, pre-paid costs. Here's the issue:  My first night hotel allows penalty-free cancellation 24 hours prior to arrival. CFAR requires 48 hours notification. So, barring some circumstance whereby the day we're scheduled to leave and wouldn't be able to - which would very likely be a covered reason under the policy (in which case CAFR won't be used anyway), WERE I to use the CFAR by canceling, say, a week or so prior to the trip - I have plenty of time to cancel the first hotel. So it just seems ridiculous to insure a cost that, by the time the CFAR would be activated, will no longer even exist. The only pre-paid amount I have is the flights (when I decide to book them - haven't done so yet). I realize that you must purchase the insurance within a specified time frame in order to qualify for CFAR and have read that you can't pick and choose as to which non-refundable costs you want to insure, and so the question comes down to - should I insure the first night's rate even though there's absolutely no need to? The rule is, as explained to me - that if you wake up the day of the trip and can't go, any non-refundable pre-paid costs must be insured. So...must this include the first night's room rate? I get that the company obviously gets a higher premium with the greater amount you insure, and were I to indeed have more pre-paid / non-refundable costs, I'd definitely insure those also. But, as said, for CFAR purposes, having to activate it 48 hours prior to departure, there would be no issue with canceling the hotel - which does not even require any deposit prior to arrival. Any suggestions? I'd like to insure only the cost of the flights. 

 

Here is the wording in the policy relative to CFAR

 

If You cancel Your Trip for any reason not otherwise covered by this Policy, benefits will be paid for 75% of the Prepaid, forfeited, non-refundable Payments or Deposits You paid for Your Trip provided:

a) Your Payment for this Policy and enrollment form are received within 21 days of the date your initial Payment or Deposit for Your Trip is received;

b) You insure 100% of the Prepaid Trip costs that are subject to cancellation penalties or restrictions and also insure within 21 days of the Payment or Deposit for those Travel Arrangements the cost of any subsequent Travel Arrangements (or any other Travel Arrangements not made through Your travel agent) added to Your Trip; and

c) You cancel Your Trip 48 hours or more before Your Scheduled Departure Date.

 

 

 

Edited July 28, 2021 by OnTheJourney

[klfrodo]

The 1st question I have is "Does it make a difference if you include the price of the hotel"?

 

Travel insurance costs only increase when the total amount insured crosses any $500 threshold.

$0 - $500 is a set price

$501 to $1000 is a price etc.

 

So, if total trip cost per person is $1125 and the hotel is $225,,,, there won't be any price increase.

 

 

Having said that, if you can cancel a hotel and get all your money back,,,,, then that would fall under "refundable" Therefore, not required to insure.

[Babr]

If you are buying it to insure your flights, you may find that you will have trouble collecting on a claim. Airlines typically issue a voucher when you cancel a non-refundable fare. In that case, the insurance company considers that you have been compensated. No loss. No claim.

 

Have you discussed that with the representative to whom you spoke? If not, be sure you understand how the claims process works for cancelled air to avoid being denied.

 

I have not seen that question answered here. If it is possible to get cash reimbursement from insurance for a flight you cancel instead of a voucher, I’d like to know that myself.

[OnTheJourney]

13 minutes ago, Babr said:

I have not seen that question answered here. If it is possible to get cash reimbursement from insurance for a flight you cancel instead of a voucher, I’d like to know that myself.

 

Good point. I'll check that out. Obviously one can't 'double-dip' - taking an airline voucher and also making an insurance claim. I think perhaps the thing to do would be to simply not show up for the flight (?)  

[OnTheJourney]

3 hours ago, klfrodo said:

So, if total trip cost per person is $1125 and the hotel is $225,,,, there won't be any price increase.

The flights are a tad under $2k. The hotel is around $160. Adding the two together jumped up the price of the insurance. 

[Babr]

I don’t know so I dare not advise you on that. I’ve always wondered about insuring flights in the first place if you can’t collect except that it is required for CFAR.

I’m wondering about the wisdom of insuring the flights at all if that is the only non-refundable cost you have, especially if a voucher is acceptable.

 

 

 

Edited July 29, 2021 by Babr

[OnTheJourney]

Just talked to an agent at the website I use to book travel insurance. She isn't sure if you can refuse to accept an airline voucher. If you can, then there was no compensation and thus the amount is insurable and theoretically recoverable under CFAR. I also have one night's lodging at a hotel that requires 24 hours notice, so were we to not be able to go on the trip the morning of, I'm told that amount should be insured also since it represents a potential loss. I do NOT want an airline voucher since those must be used within a year of booking, and I'm not likely to be able to use it. Hence the search for some other means of protecting the flight costs. 

Edited July 29, 2021 by OnTheJourney

[Babr]

That is my position as well. I have no interest in a voucher I’m forced to use within a limited time.

 

The question then is whether the airline would allow you to reject a voucher. If you did, would the insurance company still deny the claim because you had the opportunity for compensation from the supplier? Would they force you to pursue a cash refund from the airline before considering your claim?

 

It is to be hoped that the insurance rep  would know. You are not the first person with that question.  It looks like filing a claim is the only way to find out.

Edited July 29, 2021 by Babr

[OnTheJourney]

I don't think the airlines are too big on giving cash refunds. What I've always read is that you get a voucher that must be used within 12 months of date of booking. Great question, also, about whether or not the insurance company would still deny a claim since you had the chance to get compensation from the airline. 

Edited July 29, 2021 by OnTheJourney

[iamtrustworthy]

7 hours ago, OnTheJourney said:

I'm planning a fly/drive trip for the fall. With the uncertainties of the recent covid escalation, I want to insure the cost of my flights. I want a CFAR policy and found one that would work well. A representative at a popular insurer website told me that besides the cost of the flights I have to insure ALL non-refundable, pre-paid costs. Here's the issue:  My first night hotel allows penalty-free cancellation 24 hours prior to arrival. CFAR requires 48 hours notification. So, barring some circumstance whereby the day we're scheduled to leave and wouldn't be able to - which would very likely be a covered reason under the policy (in which case CAFR won't be used anyway), WERE I to use the CFAR by canceling, say, a week or so prior to the trip - I have plenty of time to cancel the first hotel. So it just seems ridiculous to insure a cost that, by the time the CFAR would be activated, will no longer even exist. The only pre-paid amount I have is the flights (when I decide to book them - haven't done so yet). I realize that you must purchase the insurance within a specified time frame in order to qualify for CFAR and have read that you can't pick and choose as to which non-refundable costs you want to insure, and so the question comes down to - should I insure the first night's rate even though there's absolutely no need to? The rule is, as explained to me - that if you wake up the day of the trip and can't go, any non-refundable pre-paid costs must be insured. So...must this include the first night's room rate? I get that the company obviously gets a higher premium with the greater amount you insure, and were I to indeed have more pre-paid / non-refundable costs, I'd definitely insure those also. But, as said, for CFAR purposes, having to activate it 48 hours prior to departure, there would be no issue with canceling the hotel - which does not even require any deposit prior to arrival. Any suggestions? I'd like to insure only the cost of the flights. 

 

Here is the wording in the policy relative to CFAR

 

If You cancel Your Trip for any reason not otherwise covered by this Policy, benefits will be paid for 75% of the Prepaid, forfeited, non-refundable Payments or Deposits You paid for Your Trip provided:

a) Your Payment for this Policy and enrollment form are received within 21 days of the date your initial Payment or Deposit for Your Trip is received;

b) You insure 100% of the Prepaid Trip costs that are subject to cancellation penalties or restrictions and also insure within 21 days of the Payment or Deposit for those Travel Arrangements the cost of any subsequent Travel Arrangements (or any other Travel Arrangements not made through Your travel agent) added to Your Trip; and

c) You cancel Your Trip 48 hours or more before Your Scheduled Departure Date.

 

 

 

Hi On The Journey,

 

> A representative at a popular insurer website told me that besides the cost of the flights I have to insure ALL non-refundable, pre-paid costs. Here's the issue:  My first night hotel allows penalty-free cancellation 24 hours prior to arrival. CFAR requires 48 hours notification.

 

> The rule is, as explained to me - that if you wake up the day of the trip and can't go, any non-refundable pre-paid costs must be insured. So...must this include the first night's room rate?

 

Do you have to prepay your first night hotel's cost? That's what it comes down to.

 

This might help you, too:

https://tripinsurancestore.com/blog/what-does-prepaid-mean/

 

Steve Dasseos

[OnTheJourney]

9 hours ago, iamtrustworthy said:

Do you have to prepay your first night hotel's cost? That's what it comes down to.

No...I don't have to prepay, but I'm not sure that's the key issue, which appears to be guided by what the one agent told me over and over again: "If you wake up the day of the trip and can't go, what costs are there that you would stand to lose". Anything that you would lose needs to be insured. Given that the hotel requires 24 hours, depending on how flexible they'd be with their cancellation policy, I could conceivably be charged for the first night's rate. The policy, however, does not state anything that specficially supports this. It's a rather big deal from the standpoint that if I go one dollar over $2000 total insured amount, the cost of policy jumps significantly. Right now the airline cost, alone, is below that amount but adding the hotel stay would take it over the threshold. What really gripes me is that the cost of the policy then stays the same all the way up something like $4000 insured amount! So it would really gripe me to add this cost that, essentially, were I to actually use the CFAR clause - I have more than enough time to cancel the hotel! So..it's a money grab to some extent. I'm going to ask the insurance company directly, though he'll probably say it has to be insured..I mean..why not...more premium for them. 

 

Right now I'm more concerned with the airline question - if they offer a voucher / credit, etc. - do I have to accept that?  This is all starting to make me wonder if I should just scrap the whole trip and do something far less complicated this fall yet until (if?) this whole covid situation settles down. Spending way too much time on this. Typically we just take our chances with a fly/drive trip - can't ever recall insuring just the cost of the flights but I'm trying to avoid sitting in groups of 3 on the plane - I hate that to begin with, so have been looking more at first class costs. I can get economy seats for far less than half the price - and so would be far less concerned about insuring it. 

[OnTheJourney]

Update....just talked to the hotel...they won't charge me unless I simply don't show up and don't even let them know that I can't make it. Case closed (at least that part!)  So....the first night's lodging costs would not need to be insured - absolutely no point of doing so. 

[Babr]

Which brings us back to the air fare question. You have no other non-refundable costs to insure.

 

I, too, look forward to someone answering how/if you can file a claim and collect reimbursement rather than an airline voucher.

[Hlitner]

The airline voucher thing is quite annoying.  We have talked to a few folks who found that insurance will not pay for unused air because they argue that the airline will give a voucher.  In fact we had a situation prior to COVID when we had unused air because DW had to be medically evacuated.  When we file the trip interruption claim we were able to eventually get reimbursed for the prorated unused part of the cruise (this was over $10,000) but the insurer refused to reimburse anything for the unused air even thought it was a non-refundable fare in the days before you could normally get a voucher.  The insurer said that because we missed the flight due to a medical emergency the airline would "likely" be willing to give us a voucher.  They left us to fight with the airline who eventually gave us a voucher we could not ever use since technically it was given to Princess Cruise Lines (who had handled the air) who could not figure out how we could ever use that airline credit.  It was like an insane comedy were we got bounced back and forth between the insurer, the airline, and Princess.  

 

I mention this because I have long been critical of insurance companies who will quickly accept premiums (without question) for items that they are unlikely to ever cover.   Steve could probably speak to the issue, but I have never noticed a travel policy that had some kind of warning that they would not reimburse unused air for which a voucher can be granted.  The fact that a voucher may not be used is not relevant to the insurer.  So, for example, when you get a voucher for South African Airways that is only good for 1 month  (because it expires 1 year after you booked the flight) the insurer says, you have been made whole and they have no liability.   

 

Hank

[Babr]

Thanks, Hank. That is what I was afraid of, but I can’t remember the question being directly addressed before - which makes me wonder why it must be included as a non-refundable expense in order to qualify for CFAR. That coverage already requires an extra premium. Including air often bumps the base premium to the next level so it seems you are paying twice for something that is not likely to be reimbursed.

[Jersey42]

We rarely buy trip specific policies and usually rely on our credit card and GeoBlue Trekker. That said we bought a policy for a trip scheduled to depart in March of 2020.  We ended up canceling about two weeks prior to departure due to a medical emergency with a relative.  As part of the claim process we had to attest that if we claimed the value of the airline tickets we would not use the value of the tickets (i.e. credit) or we would have to reimburse the insurance company.  We ended up getting a small cash credit from the airline (pre paid bags and seat selection charges).  We signed the insurance form, and the insurance company promptly reimbursed us for the remaining airline amount.  They also reimbursed us for other losses.  See a copy of the form text below.

 

A few side notes:

• We purchased the Nationwide essential single trip plan.
• Before purchasing the plan I called Steve Dasseos at tripinsurancestore.com. Once Steve understood my situation, he felt that was the best plan for me even though he did not sell that plan.  He also gave me some good advice on how to purchase.  Kudos to Steve.
• I provided very thorough and complete documentation and Nationwide promptly paid the claim  promptly with no questions asked.
• It turns out the cruise we cancelled was probably one of the the last ones to sail before the COVID shutdown.  It was supposed to be a full transit Panama Canal cruise. It departed San Diego and made the first port of Puerta Vallerta.  Then everyone had to disembark and find a way home.  I am glad we never got on the ship. 😀

 

-----------------   Nationwide Airline Agreement --------------------

In order for us to complete your claim at this time, please find the following which should be signed and returned to our office.

 

Your airline tickets will have transferable value until one year from the original booking date. It is necessary for us to have a document in hand from you verifying that you do not plan to use the tickets as outlined below.

 

If this is agreeable to you and ____________ please sign this letter as indicated below and return the signed document to me at the address on this letterhead.

 

Agreement
The above noted parties agree that they do not plan to use the value of the tickets describe above by themselves or by transfer/sale to another party, and that these tickets should be considered null and void. Even so, should the listed tickets be used by anyone, all parties noted above agree to reimburse Nationwide Mutual Insurance Company and affiliated companies the value of the used ticket/tickets paid by Nationwide Mutual Insurance Company less any fees associated with reactivating the tickets for use (except fees for use of the tickets by another party not listed above as an original ticket holder). Based on this agreement, Nationwide Mutual Insurance Company and affiliated companies agree to refund the full insured value of the tickets. Please note: Your signature on this agreement is not a guarantee of payment. All final claim determinations are subject to; but not limited to, the following: policy
 

Edited July 29, 2021 by Jersey42

[Babr]

Thank you, Jersey 42, for the very useful information. I believe that is the missing piece to the puzzle.

 

Was Steve’s advice to buy that plan based on how they handle reimbursement for air or is that Airline Agreement standard across all insurers?

[Jersey42]

28 minutes ago, Babr said:

Was Steve’s advice to buy that plan based on how they handle reimbursement for air or is that Airline Agreement standard across all insurers?

No.  We never discussed airline reimbursement.  That plan just happened to meet my specific needs.  It had low coverage for items I did not need and good coverage for what I needed from a reputable company at a inexpensive price.  This was probably not a great comprehensive plan for many people, but we were mostly concerned about trip cancelation or interruption if a non traveling a relative with pre-existing conditions took a turn for the worse.   

[OnTheJourney]

2 hours ago, Babr said:

That coverage already requires an extra premium.

Not necessarily. Unless it has been 'built in' to the one policy I've been looking at - the coverage lists it as one of the provided coverages. I know that often you have to pay extra for it, along with the time limit for purchasing the policy following the purchase of the flights (or whatever). 

 

I just talked to the company I'm considering for a policy. He confirms that they do not insist on a customer taking an airline voucher, and that an airline ticket is considered part of CFAR. Hope he's right. The guy at insuremytrip mentioned one specific company that won't do this - they insist you take whatever the airline offers in the event of a customer-canceled flight. 

 

So now I'm calling the airline to make sure of what all the options are in the event of customer cancellation, with a focus on simply asking if you can refuse to take any sort of voucher or credit. I would imagine that the only time an airline will offer a refund is if there is a cancellation on their end or whatever else that would result in the flight not being available. 

Edited July 29, 2021 by OnTheJourney

[Babr]

2 minutes ago, OnTheJourney said:

Not necessarily. Unless it has been 'built in' to the one policy I've been looking at - the coverage lists it as one of the provided coverages. I know that often you have to pay extra for it, along with the time limit for purchasing the policy following the purchase of the flights (or whatever). 

 

I just talked to the company I'm considering for a policy. He confirms that they do not insist on a customer taking an airline voucher, and that an airline ticket is considered part of CFAR. Hope he's right. The guy at insuremytrip mentioned one specific company that won't do this - they insist you take whatever the airline offers in the event of a customer-canceled flight. 

Thanks for the update. I’m glad the representative from the insurance company was forthcoming. Sometimes they tell you that you must file a claim first so they can consider the specific circumstances.

 

Are you looking at a standard comprehensive travel policy in order to get CFAR or is there some other kind for travel expenses without medical and evacuation?

Can you mention the names of the companies? I’m wondering if the Airline Agreement mentioned by Jersey42 is common practice across multiple insurance companies. Maybe that is why the rep at insuremytrip pointed out one that insists you take the voucher.
 

 

 

[OnTheJourney]

23 minutes ago, Babr said:

Are you looking at a standard comprehensive travel policy in order to get CFAR or is there some other kind for travel expenses without medical and evacuation?

Just a standard policy. It's an outfit called Crum & Forster - never heard of them before. Very few come up as having CFAR available. I've typically used Generali but are not happy with them right now due to their not making good on a voucher for insurance money I paid for a March '20 cruise that was canceled. Long story - I posted a separate thread about it. 

[Babr]

23 minutes ago, OnTheJourney said:

Just a standard policy. It's an outfit called Crum & Forster - never heard of them before. Very few come up as having CFAR available. I've typically used Generali but are not happy with them right now due to their not making good on a voucher for insurance money I paid for a March '20 cruise that was canceled. Long story - I posted a separate thread about it. 

It may be that CFAR is less common because Covid is still very much with us. I have read a lot of posts from people complaining about protocols and restrictions. When the cruise line assistance plans expire, it will be up to insurance to fill the gap, and insurers are not likely to take on the risk of folks using CFAR just because they are unhappy.

 

What about the company that insists you take the voucher? I want to avoid them.

 

I’m glad you posted your question. You are having to do most of the leg work to find the answer, but opening up the conversation has provided good information for everyone.

Edited July 29, 2021 by Babr

[Roger88]

1 hour ago, Jersey42 said:

No.  We never discussed airline reimbursement.  That plan just happened to meet my specific needs.  It had low coverage for items I did not need and good coverage for what I needed from a reputable company at a inexpensive price.  This was probably not a great comprehensive plan for many people, but we were mostly concerned about trip cancelation or interruption if a non traveling a relative with pre-existing conditions took a turn for the worse.   

This is one of the reasons why I dont purchase stuff beforehand. You never know when you can or cannot make it. Schedules are also always full and its hard to track the changes. This is the reason why you should never rush to buy tickets and cruises. You never know how it all can change. 

[iamtrustworthy]

8 hours ago, OnTheJourney said:

No...I don't have to prepay, but I'm not sure that's the key issue, which appears to be guided by what the one agent told me over and over again: "If you wake up the day of the trip and can't go, what costs are there that you would stand to lose". Anything that you would lose needs to be insured. Given that the hotel requires 24 hours, depending on how flexible they'd be with their cancellation policy, I could conceivably be charged for the first night's rate. The policy, however, does not state anything that specficially supports this. It's a rather big deal from the standpoint that if I go one dollar over $2000 total insured amount, the cost of policy jumps significantly. Right now the airline cost, alone, is below that amount but adding the hotel stay would take it over the threshold. What really gripes me is that the cost of the policy then stays the same all the way up something like $4000 insured amount! So it would really gripe me to add this cost that, essentially, were I to actually use the CFAR clause - I have more than enough time to cancel the hotel! So..it's a money grab to some extent. I'm going to ask the insurance company directly, though he'll probably say it has to be insured..I mean..why not...more premium for them. 

 

Right now I'm more concerned with the airline question - if they offer a voucher / credit, etc. - do I have to accept that?  This is all starting to make me wonder if I should just scrap the whole trip and do something far less complicated this fall yet until (if?) this whole covid situation settles down. Spending way too much time on this. Typically we just take our chances with a fly/drive trip - can't ever recall insuring just the cost of the flights but I'm trying to avoid sitting in groups of 3 on the plane - I hate that to begin with, so have been looking more at first class costs. I can get economy seats for far less than half the price - and so would be far less concerned about insuring it. 

Hi OnTheJourney,

 

> I don't have to prepay, but I'm not sure that's the key issue, which appears to be guided by what the one agent told me over and over again

 

Prepayment is the key. If it's not prepaid, you don't need to insure it. Companies will let you, but you're not required to insure it.

 

> Right now I'm more concerned with the airline question - if they offer a voucher / credit, etc. - do I have to accept that?

 

You don't have a choice about accepting the credit - the airline will issue you one if their Contract of Carriage states so.

 

Again, some companies will let you give up your right to use the credit if you are reimbursed for the airfare as part of a claim.

 

I'm not a big fan of insuring the airfare when there are no change fees and someone would re-use the air on a different trip if they cancelled.

 

I hope this helps,

 

Steve Dasseos

[iamtrustworthy]

2 hours ago, OnTheJourney said:

Just a standard policy. It's an outfit called Crum & Forster - never heard of them before. Very few come up as having CFAR available. I've typically used Generali but are not happy with them right now due to their not making good on a voucher for insurance money I paid for a March '20 cruise that was canceled. Long story - I posted a separate thread about it. 

Hi OnTheJourney,

 

It sounds like you're talking about Travel Insured. I've sold them for 20 years. It's a good company, but I'm not sure you'd benefit from the CFAR. Why exactly do you want the CFAR?

 

Steve Dasseos