CTA Trip Cancellation & Travel Insurance 2 — Questions and Answers
Question 1: A traveler purchases a 'Cancel for Any Reason' (CFAR) upgrade. What percentage of prepaid, non-refundable costs is typically reimbursed under CFAR?
- 100%
- 75% (Correct answer)
- 50%
- 25%
Correct answer: 75%
CFAR coverage typically reimburses 75% of prepaid, non-refundable trip costs, not the full 100%.
Question 2: Which of the following is a common requirement to qualify for Cancel for Any Reason (CFAR) coverage?
- Cancel at least 24 hours before departure
- Purchase the policy within 10–21 days of initial trip deposit (Correct answer)
- Have a pre-existing medical condition
- Travel internationally only
Correct answer: Purchase the policy within 10–21 days of initial trip deposit
CFAR must typically be purchased within 10–21 days of the initial trip deposit to qualify.
Question 3: A client's travel insurance includes 'Interrupt for Any Reason' (IFAR) coverage. When does IFAR apply?
- Before departure if plans change
- After a trip has already begun and the traveler cuts it short (Correct answer)
- When a traveler misses a connection
- When baggage is delayed more than 12 hours
Correct answer: After a trip has already begun and the traveler cuts it short
IFAR allows a traveler to cut short an already-begun trip for any reason and receive partial reimbursement.
Question 4: What does 'primary coverage' mean in the context of travel insurance?
- It only pays after other insurance has paid
- It pays claims first, regardless of other insurance the traveler holds (Correct answer)
- It covers only the primary insured, not dependents
- It is the most expensive tier of coverage
Correct answer: It pays claims first, regardless of other insurance the traveler holds
Primary coverage pays out first without requiring the traveler to file with other insurance policies beforehand.
Question 5: A traveler's cruise is cancelled by the cruise line due to a hurricane. Which coverage would most directly reimburse the traveler for this loss?
- Baggage loss coverage
- Trip cancellation due to supplier default
- Trip cancellation due to weather/natural disaster (Correct answer)
- Medical evacuation coverage
Correct answer: Trip cancellation due to weather/natural disaster
Trip cancellation due to weather or natural disaster is the coverage that applies when a supplier cancels due to a hurricane.
Question 6: Which of the following best describes a 'named peril' travel insurance policy?
- Covers all reasons for cancellation except those explicitly excluded
- Covers only the specific risks listed in the policy (Correct answer)
- Covers any reason if purchased within 21 days of deposit
- Covers only international travel risks
Correct answer: Covers only the specific risks listed in the policy
A named peril policy only covers cancellation or interruption caused by specific risks explicitly listed in the policy.
Question 7: A traveler's non-refundable hotel deposit is $800 and their flights cost $1,200. They cancel due to a covered illness. What is the maximum trip cancellation benefit they could claim?
- $800 only
- $1,200 only
- $2,000
- Only what the policy limit allows, up to $2,000 (Correct answer)
Correct answer: Only what the policy limit allows, up to $2,000
Trip cancellation reimburses up to the policy's stated limit, which cannot exceed the total non-refundable trip cost.
CTA Trip Cancellation & Travel Insurance 2
A traveler purchases a 'Cancel for Any Reason' (CFAR) upgrade.
What percentage of prepaid, non-refundable costs is typically reimbursed under CFAR?