We’re living in uncertain times, and that means you have to take more precautions when booking travel for the upcoming months.
Case in point: summer travel to Europe. Every major news outlet has been reporting that the European Union only has enough jet fuel to last another 6 weeks because supplies are being limited by the Iran war.
Yesterday, Germany’s Lufthansa canceled 20,000 flights to safeguard what fuel stores it has. Other carriers are expected to follow suit.
So will having travel insurance protect you if you’re planning on a European vacation?
The answer: No. And yes. And maybe no again if you don’t act soon.
Let me explain.
Most standard policies have a limited number of travel disruptions they cover.
“There’s no cancellation coverage for a fuel shortage,” Daniel Durazo, director of communications for insurance company Allianz Partners, told me. “Covered reasons [for getting money back on a policy] normally include: you’re sick, the kids are sick, grandma breaks her hip, there’s severe weather, hurricanes, job loss. A fuel shortage is not on that list.”
So a standard policy won’t help.
However, a policy with what’s known in the industry as Cancel for Any Reason coverage—or CFAR for short (Allianz Travel Insurance uses the term “Cancel Any Time,” but it’s the same thing)—may still protect you.
This type of policy is pricier by as much as 50% and only covers a percentage of your expenses, but does allow you to cancel for any reason—with the exception of what are called known events, i.e., occurrences considered expected or foreseen.
And here’s where the need to buy soon comes in.
A travel insurance company will usually not let you buy any kind of policy once a risk factor (i.e., a known event) has been discovered.
So, for example, once a hurricane has been given a name and a predicted path, it’s no longer possible to buy an insurance policy to protect against that storm for one of the destinations it’s expected to hit.
Interestingly, I know of no travel insurance company that has stated—yet—that predictions of an upcoming fuel shortage are a known event and therefore uninsurable.
But that could change.
Which is why it’s important to get a policy sooner rather than later. (Probably.)
The important thing to remember: The decision to buy a travel insurance policy at all really depends on what type of travel scenario you’re trying to protect yourself against.
Say, for instance, you’re going to be flying to Europe, and you’ve made hotel reservations that can be canceled. If that is the extent of your advance purchases, you likely don’t need insurance because you can get your money back on lodgings and the airline will refund the cost of the flight if it doesn’t take off.
Unless the flight is canceled at the very last moment (unlikely), you won’t have to cover unexpected in-airport expenses, either.
But if you’ve already booked and paid for a European tour or a Mediterranean cruise that you might miss due to a canceled flight, getting CFAR insurance would be a good investment.
Just be sure to read the tour or cruise company’s fine print first.
Let’s hope the Strait of Hormuz reopens soon—and stays open. The continued closure will affect all of us, in ways we cannot yet fathom.
