Navigating travel insurance can be tricky, especially when optional upgrades like Cancel For Any Reason (CFAR) coverage have strict state-based availability. For families with children attending college out of state, these rules can create confusion.
If your home state allows CFAR coverage, but your child’s college state does not (such as New York), you may be wondering what your options are. Below, we address common questions regarding state residency, tax status, and purchasing CFAR travel insurance for college students.
My child goes to college in New York, where Cancel For Any Reason (CFAR) is not available. However, our family lives in Texas, and my child has a Texas driver's license. Can they still purchase a CFAR travel insurance plan?
In most cases, yes! For travel insurance purposes, eligibility for coverages like Cancel For Any Reason is based on the traveler's legal state of residence, not where they are temporarily residing for their studies. If your child’s primary legal residence is Texas, they can use Texas as their home state on the application. This makes them eligible for CFAR options, such as the upgrade available on the Pathway Premium plan.
How exactly is "legal residency" determined for a college student living out of state?
Legal residency is heavily tied to how and where taxes are filed. If your child is claimed as a dependent on your tax returns in your home state (e.g., Texas), they are considered a legal resident of that state. Alternatively, if they file their own taxes but establish your home state as their primary permanent address, their residency remains in that home state.
What if my college student works a part-time job in their college state and files taxes there?
A student can maintain their primary legal residency in their home state even if they earn income in their college state (like New York). As long as they file their taxes claiming the college state earnings as "out-of-state income" while keeping their home state as their permanent, primary residence, they should be fine. They would still be subject to the travel insurance rules and availability of their home state.
Does the state my child is flying out of affect their CFAR eligibility?
No, the departure state does not dictate insurance eligibility. For example, if your student is legally a Texas resident but flying directly from an airport in New York to an international destination, they are still considered a Texas resident for insurance purposes. They do not need to depart from their legal home state to utilize its insurance eligibility criteria.
What happens if a traveler legitimately changes their permanent residency to a restricted state like New York?
If a person completely relocates, gets a New York driver's license, registers to vote in New York, and files taxes as a primary permanent resident of New York, they would be subject to New York's insurance regulations. In this scenario, they would unfortunately not be eligible to purchase CFAR coverage, as New York does not permit it.
Which travel insurance plan should I consider if I want CFAR coverage for my student?
For travelers seeking maximum flexibility, the Pathway Premium plan is the gold standard of protection. It offers the highest standard coverage limits in the Pathway series and provides the option to add Cancel for Any Reason (CFAR) coverage for eligible residents. This allows travelers to cancel their trip for reasons not traditionally covered under standard policies, protecting their non-refundable trip costs.
Still have questions about your specific residency situation or which plan is right for your upcoming trip? Contact our licensed insurance representatives for personalized assistance!
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