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3 ways to protect your money if you plan to travel or vacation during the pandemic

“If you want to at least protect some of your investment ... consider CFAR insurance.”

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I learned the hard way that if you're planning a trip during a pandemic, you need to make sure early on that you won't lose money if things go awry. My December flight to visit my family abroad got canceled, and I missed the window to get back my full Airbnb cost. It cost me $550.

The pandemic presents ongoing uncertainty when it comes to trips and vacations. "Anyone booking travel right now," says Summer Hull, family travel columnist at The Points Guy, needs to be extra careful: "We never have a crystal ball, but right now we know for sure our crystal ball is foggy."

The Centers for Disease Control and Prevention recommends postponing all travel for the time being. Still, if you're planning some sort of safe holiday or spring travel this year, here are three ways to protect your money, according to experts.

Check the refund policy

Before you book any component of your trip, check its refund policy.

"In general, we have seen many travel suppliers maintain very lenient refund policies in response to the Covid-19 pandemic," says Megan Moncrief, chief marketing officer at SquareMouth. "However, as it extends longer, it can become more likely for travel suppliers to tighten their refund policies."

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Reading the fine print of the policies of the hotels, Airbnbs, cars, RVs, or whatever else you plan to rent can be tedious, but it's worth it to understand exactly what kind of financial risks you're taking if you sign up.

Hull gives the example of Homes & Villas by Marriott International, a luxury home rental service, as one that's offered some leniency with cancellations. "They just extended a policy through March," she says, "where a lot of the properties there have 10-day cancellations. All you lose is $75 as long as you cancel by 10 days out."

Put details in writing

Some rental owners are willing to negotiate the terms of a cancellation policy given these uncertain times. If this is an option for you, make sure to set terms you're comfortable with, and then get a record of those terms.

"For some ski trips I've been planning," says Hull, "I have been messaging with the owner directly, getting it in writing that they will permit closer end refunds if the trip falls apart because of Covid."

Getting details in writing is one way to ensure you lose less money if local restrictions or the general situation change your plans, she says.

Consider a Cancel for Any Reason (CFAR) insurance policy

Typically, another way to protect some of your vacation investment is travel insurance. Unfortunately, a lot of travel insurance does not cover pandemics, so if you're considering a specific policy, make sure to carefully check its terms.

Even if it doesn't cover pandemics, some insurance will offer the Cancel For Any Reason (CFAR) add-on, which is just what it sounds like: It means you can back out and still get some of your money returned.

In general, we have seen many travel suppliers maintain very lenient refund policies in response to the Covid-19 pandemic.
Megan Moncrief
Chief marketing officer, SquareMouth

"A standard cancellation policy costs about 7%-10% of the insured trip cost," says Moncrief. "CFAR increases that premium by about 40% and refunds up to 75% of the insured trip cost." So, say your trip cost $100. Your insurance without CFAR would be $10, and your insurance with CFAR would be $14.

"If you want to at least protect some of your investment and it's otherwise not going to be fully refundable," says Hull, "strongly consider Cancel For Any Reason insurance."

CFAR does need to be purchased within weeks of booking your trip, so make sure to do your research about the rentals you're making and the insurance you're considering before you put your money down. Hull recommends Allianz travel insurance for anyone considering it.

All in all, if you're not booking refundable trips right now, "you know you're gambling," says Hull. "Just really zero in on the ones that are refundable and changeable. Ignore the rest of what's out there because it may not be worth the gamble."

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