Sure home exchangers are saving loads of money on their travel costs by swapping homes instead of paying for lodging, but one item you may want to spend a little extra on is travel insurance with ‘cancel for any reason’ coverage.

Here’s why: ‘cancel for any reason’ coverage lets you cancel your trip for any reason not listed in the standard plan coverage and get up to 100% of your total trip costs back.

This means that even though you don’t have pre-paid lodging expenses to worry about, you can still be reimbursed for your lost airfare and other pre-paid expenses.

Why not rely on standard trip cancellation benefits?

Standard trip cancellation benefits reimburse travelers for their pre-paid non-refundable trip costs if the trip is cancelled for a covered reason. This means that the reason must be listed in the travel insurance plan document to get reimbursed for your expenses.

This is an important distinction that catches many insured travelers off guard.

‘Cancel for any reason’ coverage is a catch-all benefit that lets you cancel your trip and receive between 50 and 100% of your trip costs back. No questions asked. After all, no travel insurance plan lists ‘our hosts changed their mind about exchanging homes’ as a covered reason to cancel your trip.

15 Trip cancellation reasons covered by ‘cancel for any reason’

‘Cancel for any reason’ coverage will protect you if:

1. A terrorist attack occurs, and you’re uncomfortable about flying right now.
2. The transportation workers strike and you can’t reach your destination.
3. Your sister-in-law is very ill and you have to help care for her children.
4. Your boss demands that you stay and finish the project before your trip – or else.
5. The U.S. State Department issues a travel warning and you decide not to go.
6. Your best friend is in a terrible car accident and you want to be at her side.
7. A natural disaster occurs – either at your destination or at home – and you decide to stay home.
8. Your son’s best friend commits suicide and you want to help him through his grief.
9. You’ve been invited to interview for the job of a lifetime – during your vacation week.
10. A flu epidemic breaks out and your babysitter cancels because she started running a fever.
11. Your beloved pet is ill or dying.
12. Your nanny is deported.
13. You decide you can’t afford the trip after all.
14. You change your mind.
15. Your home exchange partners changes their mind.

These are all very real reasons that very real travelers have been forced to cancel their trips – and many of these reasons (depending on the travel insurance plan) are not covered by the standard trip cancellation benefit.

Important facts about ‘cancel for any reason’

It’s important to understand that ‘cancel for any reason’ (just like many insurance benefits) has a number of rules that apply and make the coverage valid.

Those rules include the following:

• You have to purchase your insurance within a certain number of days after making the initial trip payment. In the case of home exchangers, the first payment is often the purchase of their airlines tickets.
• You have to insure 100% of your pre-paid travel arrangements. For home exchangers, this is usually pretty easy and consists of your transportation costs and any pre-paid non-refundable tours, etc.
• You should check the travel insurance plan’s per-person maximum limit to be sure it’s enough to recover your pre-paid and non-refundable costs.
• If you have to cancel, it must be within the plan’s designated number of days prior to departure. For some plans, you can cancel at the last minute – others require 2 days’ notice.
• Your reimbursement may be subject to cancellation penalties and depending upon the plan, you may not receive 100% of your expenses back (although you can get coverage for 100%, you have to choose the right plan).

See a full review of ‘cancel for any reason’ coverage and get a list of companies and plans that include this coverage.

Many of us are looking at our list of resolutions for the new year, and if travel is on your to-do list for the coming year, it just might be time to look into your travel insurance coverage ahead of time.

Travel insurance is designed to save a traveler from expensive financial losses when unexpected things happen while you’re traveling:

• Your passport is stolen from your backpack in Madrid, and you’ve got reservations in Paris in a few days.
• Wandering along a beach in Costa Rica, you step on something sharp and cut your foot badly.
• You get a phone call in the night – your mother is very ill and you have to get home quickly.

Here are 3 reasons to consider buying an annual travel insurance plan versus purchasing your travel insurance on a trip-by-trip basis.

1. Coverage for Planned Trips and Last-Minute Travel

Annual travel insurance plans cover all the trips you take during the year – those that are planned well in advance and those that happen when you snag a great last-minute travel deal.

The best part? You don’t have to remember to buy your travel insurance with each and every trip! With an annual travel insurance plan, you’ve already handled that detail and you can forget about it (until next year, of course).

2. Same Coverage, Same Hotline All Year Long

Once you’re familiar with the coverage, you have that same coverage all year long. The travel insurance policy is the same – as is the toll-free hotline you’ll need to call, so there’s a lot less keeping track of policy details and phone numbers. Make a copy of the policy and keep it on your mobile device or in your email, program the toll-free number into your phone and away you go.

3. Cost Savings for Frequent Travelers

And last, but certainly not the least important reason – travelers who purchase annual travel insurance often save substantially because annual policies are more cost effective than purchasing separate policies for each trip if you’re a frequent traveler, such as a business owner, an academic, journalist, or retiree. Families on round-the-world trips should certainly look into annual coverage as well.

Let’s look at an example

Let’s take a look at an example: our sample traveler is 43 and she lives in New York. At the start of the year, she knows she’ll be taking the following trips:

1. A two-week vacation in Costa Rica in September
2. A three-day yoga retreat in California in July
3. A five-day girlfriend getaway to Mexico in June
4. A conference trip to New York in March
5. An unknown number of business trips to meet with clients

She’d like to have some coverage for trip interruption (in case something happens and she needs to get home quickly), as well as emergency medical and evacuation coverage for those trips outside the country (where her medical insurance won’t apply).

We ran those details through our travel insurance comparison tool and came up with 3 plans that meet her criteria:

While that price tag may look scary, take a look at what her known individual trips would cost – all were quoted without trip cancellation coverage to make a fair comparison:

1. The Costa Rica vacation: $25-$42
2. The yoga retreat in California: $20-$38
3. The girlfriend getaway to Mexico: $18-$30
4. The conference in New York: $25-$41

Of course, if this traveler added trip cancellation, those individual plan prices would be higher and she might prefer to have the trip cancellation protection.

In short, she’ll be spending as much as half the cost of an annual plan by covering her known trips and she still has all those business trips to cover. Is an annual plan right for this traveler? It depends on her concerns and needs.

Is annual travel insurance the same coverage?

No, it’s not. There are important differences between annual travel insurance and single-trip coverage plans, including the following:

• Trip cancellation is limited, but some plans include good trip interruption coverage.
• Medical coverage is usually secondary and doesn’t apply to trips inside your home country.
• Upgrades like coverage for pre-existing conditions are not always available (although some plans do offer it).
• The number of medical evacuations may be limited to a certain number per year (usually 2).
• Plus other differences.

So it’s important that you carefully review the description of coverage to be 100% confident in your travel insurance purchase.

Some time ago, we wrote about when it makes sense to purchase an annual travel insurance plan, but what types of travelers need annual travel insurance? Annual travel insurance is, very specifically, travel insurance that covers all of the trips a traveler will take over the course of a year. It means that the traveler doesn’t have to get individual coverage for each of their trips because they will have the same coverage all year long.

So, who needs annual travel insurance?

1. Frequent business or academic travelers – if you travel several times a year for business meetings, academic conferences, and more
2. Entrepreneurs and business owners – if you often have to travel last-minute with little to no time to accommodate the advance purchase requirements of your travel insurance coverage
3. Retirees – if you’re active and healthy and traveling the world as part of your retirement dream, then an annual plan means not having to purchase multiple individual plans
4. Families on round-the-world trips – if you are taking a year off and traveling around the world with your kids, you’ll want the travel medical coverage that ensures you won’t face a high medical bill if anyone gets sick or injured
5. Journalists and media professionals – if you have overseas assignments that regularly put you in harm’s way, having the right travel medical coverage and evacuation coverage can be a great comfort

The key benefit to having an annual travel insurance plan is that a traveler has the same worldwide coverage for a full 12 months, but it’s also economical to purchase travel insurance on an annual basis if you take many trips each year.

The key difference? Little to no cancellation coverage is included in an annual travel insurance plan.

Read all about the differences and benefits of having an annual travel insurance plan, including what annual trip insurance costs and which companies offer annual travel insurance.