There's a warning for holidaymakers booking Cancel for Any Reason (CFAR) insurance, as many believe it guarantees a full refund. But the reality is far more restrictive and costly, say experts.
With increasing unpredictable flight disruptions - from extreme weather to IT outages - and rising travel costs, CFAR insurance is marketed as the ultimate flexible safety net. However, consumers need to read the fine print to avoid unexpected financial losses.
The key pitfalls of CFAR policies include:
- Strict purchase windows – CFAR must usually be bought within 10-21 days of booking. Miss this window, and you’re ineligible.
- Partial refunds – Most policies only reimburse 50-75% of trip costs, despite CFAR typically costing 40-60% more than standard travel insurance.
- Limited cancellation flexibility – Policies require cancellation at least 48 hours before departure, meaning last-minute changes aren’t covered.
Maisie Blewitt, head of commercial at holiday resale platform Transfer Travel, warns: “Travellers assume CFAR gives them total cancellation flexibility, but the reality is far more restrictive. If you don’t read the fine print, you could end up paying hundreds more for a policy that doesn’t fully protect you.
“With cancellation rates rising and many struggling with travel costs, it’s crucial to compare your options - whether that’s comprehensive insurance, flexible booking policies, or even resale platforms that allow you to recover costs on non-refundable trips - a solution that many people still don’t realise exists.”
What counts as having travel insurance in place?
— Martin Lewis (@MartinSLewis) May 13, 2025
On the back of my 'get it ASAB (as soon as you book) tip many people ask about what counts as having insurance in place. So put simply...
- Single trip policies. You pay for insurance to cover a specific trip away (eg 10-17…
CFAR policies are currently far more common in the US than in the UK, where insurers don’t offer standalone cancellation coverage - only add-ons to existing policies.
Some UK providers also impose strict eligibility and coverage limits, making CFAR less comprehensive than many travellers expect.
Why does Martin Lewis recommend ASAB travel insurance?
Martin Lewis has recommended travellers to book their travel insurance at the same time as their holiday, or ASAB) to maximise cover. This isn't a specific policy, it's just a way to say 'as soon as you book'.
"Travel insurance is not just to cover you while you're away," he says. "It's also very important to cover you in case something happens before you go that stops you going.
"I have a rule: you should get your travel insurance ASAB - as soon as you book. ASAB..."
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Tips for smarter travel protection for holidaymakers
- Read policy terms carefully – Don’t assume CFAR means full refunds or no conditions.
- Consider whether standard insurance covers your needs – Many policies already cover cancellations due to illness, emergencies or job loss, and are much cheaper.
- Look at alternative solutions – Flexible booking options, credit card protections, and resale platforms for non-refundable trips may be more cost-effective.
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