How Annual Travel Insurance Could Save You Money

For folks who travel frequently over a long period of time, no litany of travel mishaps and inconveniences can do justice to the vagaries of actual life on the road. If you aren’t getting yourself in a bit of a jam once in a while, you probably aren’t trying hard enough. Sound familiar? You might be a perfect candidate for a neglected travel product: annual travel insurance.

Not many people even know about it, but annual travel insurance is an economical, convenient, and common-sense option for people who travel multiple times a year. Instead of purchasing separate policies for each trip, you purchase a single annual policy that covers any travel you do in a given year.

As you might guess, annual trip insurance is primarily useful to folks who travel a fair amount, but the threshold is lower than you might think. Most travel insurance companies say that you will start to see savings and benefits if you insure three or more trips per year.

It doesn’t matter if you’re traveling for pleasure or business; all of your trips are covered—although if your company is paying for the insurance, you might want to get approval to use the policy while you’re on leisure trips.

Most travel insurance companies offer tiered plans for annual insurance. In the simplest terms, here is what your choices will typically be:

• A basic plan that covers medical costs and evacuation, expenses (meals, lodging, etc.) associated with unexpected travel delays, rental cars, and perhaps baggage coverage.
• A mid-tier plan for frequent travelers that adds in a limited amount of trip cancellation and interruption coverage.
• A top-end plan tailored mostly to business travelers, with the most comprehensive coverage, including high coverage limits.

Even if you are a frequent traveler for whom multi-trip travel insurance seems to make sense, this outline of the pros and cons of annual travel insurance should help inform your decision.

Pros:

• Convenience: Buying travel insurance is another hassle during the trip-planning process; having to do it just once per year will appeal to many travelers.
• Consistency of coverage: Knowing that you’ll have the same level of coverage for all trips can make the process of buying insurance and filing claims less confusing.
• Corollary to both of the above: You only have to read the fine print once.
• If you frequently book last-minute trips, having an annual plan already in place can be helpful.
• You’ll typically save money when purchasing annual insurance versus individual trip plans.
• Travel emergency coverage is in place even for trips for which you might not normally purchase extensive insurance.
• This is also the case with medical and dental coverage; having a year-long policy that covers unexpected problems during every trip offers convenience and peace of mind.
• If you travel with many valuables (laptops, phones, cameras, etc.), travel insurance adds an important layer of protection.
• Some plans may include children under 17 for free, though this is often the case with single-trip insurance as well.

Cons:

• The consistency of coverage can be a negative if your travel is varied in type and destination; your insurance needs for a weekend trip to Disney are different from those on a two-week safari, for example.
• Because costs can vary so greatly from one trip to the next, trip cancellation coverage may be limited or not included in the most economical annual plans.
• If you run into problems on more than one trip, you might start to run up against policy pay-out limits.
• A common complaint with travel insurance is that it can be difficult to know what is covered, and this remains the case with annual insurance.
• There are limits to all elements of your coverage, so if you are traveling with expensive equipment, you will want to be aware of any caps.

Single-trip insurance typically costs anywhere from 3 to 10 percent of the upfront trip cost. Pricing varies depending on your age and where you live. As a test, I used my own information and found the following: To insure a single $2,500 U.S. domestic trip with Allianz Travel, plans range from $82 for the basic plan up to $130 for the company’s top product. The range for a similarly priced international trip was $96 to $176.

The corresponding annual packages cost from $135 annually for Allianz’s basic plan, which includes no trip cancellation or interruption coverage, to $500 annually for the executive plan; the mid-tier plan was $275 per year. These numbers show that you will break even after two to three trips, depending on the level of coverage you need.

Travel Guard offers the Travel Rite Annual Plan, which priced out at $267 for me, with a coverage bundle similar to the mid-tier plan from Allianz.

IMG Global’s Patriot Multi-Trip Travel Medical Insurance ranged from $200 to $245 for me alone, and went up to $300 – $367 when I added a spouse.

Not all travel insurance companies offer annual insurance, and the cost and coverage components of annual plans do vary by company. Here are several companies to consider:

• Allianz Travel Insurance
• HTH Travel Insurance
• International Medical Group (IMG)
• Seven Corners
• TravelGuard
• USI Affinity Travel Insurance Services

To compare annual plans from different companies, check out SquareMouth.

Figuring out what is actually covered in any given plan can be a challenge. In many cases, it might seem like there are more exclusions than inclusions. For example, Allianz excludes preexisting medical conditions, intentional self-harm, suicide attempts, pregnancy (unless there are complications), fertility treatments, childbirth, mental or nervous disorders, alcohol or drug abuse, epidemics, war, nuclear reaction, criminal acts, bungee jumping, caving, skydiving, and body contact sports—to name a few. Yikes.

Trip cancellation, in particular, gets tricky; some insurance companies offer a “cancel for any reason” option if you are concerned about this, but for annual plans, that may have to be an add-on.

So what’s actually covered? Typically, it’s things like trip interruption due to health problems, flight delays, damaged rental cars, delayed or lost suitcases, and emergency medical evacuation.

Many insurance companies sell cruise insurance as a separate product, but the offerings are pretty much the same. If you decide to purchase annual insurance, make sure to ask whether it also includes cruise coverage. To learn more, see Cruise Insurance: Everything You Need to Know.

Many insurance companies let you buy travel insurance until very close to your departure date, sometimes within days or hours. This can be helpful to the procrastinators and optimists among us.

Be careful, however: An attempt to buy travel insurance to sidestep problems due to weather or other natural events that are already underway may not work. Once something like this starts, only travelers who purchased their policies beforehand are typically covered.

In addition, many insurers do not cover preexisting conditions, so if you have a medical problem before a trip and then buy insurance, you may not be covered for travel issues related to that medical condition, depending on when it developed and the length of your policy’s lookback period. You may be able to get this condition waived if you purchase soon after your initial trip deposit.

This is the type of purchase where getting on the phone to discuss specific questions is well worth your time.

With five or six extended trips on my radar in the next 12 months, I may be considering annual insurance myself. What about you? Share your thoughts in the comments below.

More from SmarterTravel:

• 18 Surefire Ways to Get Sick While Traveling
• The Best Way to Carry Money Overseas
• Travel Insurance Coverage: 17 Things Your Policy Won’t Cover

Editor’s note: This story was originally published in 2017. It has been updated to reflect the most current information.