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.
What Is 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.
Who Should Purchase Annual Travel Insurance?
As you would 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 trips are covered -- although if your company is paying for the insurance, you might want to get approval to use the policy while on leisure trips.
What's Included in an Annual Travel Insurance Policy?
Most travel insurance companies have tiered plans for annual insurance. In the simplest terms, here is what you will typically find:
- A basic plan that includes medical coverage and evacuation, reimbursement for expenses associated with unexpected travel delays (meals, lodging, etc.), rental car insurance 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
Annual Travel Insurance Pros and Cons
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 may help inform your decision.
- Convenience: Buying travel insurance is just another hassle of the trip planning process, and having to do it only once per year may appeal to many travelers.
- Consistency of coverage: Knowing you have the same 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.
- For folks who often book last-minute trips, having an annual plan already in place can be helpful.
- There is typically a cost savings 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 will cover unexpected problems on all trips offers convenience and peace of mind.
- For folks who travel with a lot of stuff (laptops, phones, cameras, etc.), travel insurance adds an important layer of protection.
- Some plans may include children under 17 for free (this is often the case with single-trip insurance as well).
- 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 by trip, 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.
Pricing and Availability
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 trip with Allianz Global Assistance, plans range from $80 for the basic plan up to $130 for the company's top product for a single domestic trip. The range for a similarly priced international trip was $96 to $176.
The corresponding annual packages cost from $125 annually for Allianz's basic plan (which includes no trip cancellation or interruption coverage) to $459 annually for the executive plan; the mid-tier plan was $249 a 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 a 50-year-old from New Jersey, with a coverage bundle similar to the mid-tier plan from Allianz.
Seven Corners Wander Annual plan came in at $265 per year if coverage included trips within the U.S., and $195 if not (go figure); prices went up if any of your individual trips were over 30 days. Adding family members to your primary plan was economical, with a spouse and two children costing an additional $100 total for international trips.
Not all travel insurance companies offer annual insurance, and the cost and coverage components of annual plans vary by company. Here are several companies to consider:
To compare annual plans from a number of different companies, visit Squaremouth.com.
What Does Annual Travel Insurance Cover?
Figuring out what is actually covered in any given plan can be a challenge. It's important to read all the fine print before purchasing any policy.
Of the sites I visited, the Allianz site had the best way to figure out the best options, with a pretty slick webpage that switches back and forth to show you benefits by plan if you click the "Benefits" radio button, and detailed descriptions of what is covered if you click the "Covered Reasons" button.
The "Covered Reasons" are quite detailed. For example, all of Allianz's packages cover the following: "Collision with Animal: A car you're renting is damaged due to a collision with an animal while in an accident or while it's left unattended."
Figuring out what is not covered can be even trickier; when researching plans, check for exclusions, which can be considerable; this is from Allianz's "General Exclusions" on annual insurance:
"In addition to any other exclusions that may apply to a particular benefit, no coverage is provided for any loss that results directly or indirectly from any of the following unless as specifically included: all extreme, high risk sports including but not limited to: bodily contact sports; skydiving; hang gliding, bungee jumping, parachuting; mountain climbing or any other high altitude activities, caving, heli-skiing, extreme skiing, or any skiing outside marked trails; existing medical conditions; intentional self-harm, suicide or attempted suicide; pregnancy (unless unforeseen complications or problems), fertility treatments, childbirth or elective abortion; mental or nervous health disorders, (like anxiety, depression, neurosis or psychosis); use or abuse of alcohol or drugs, or related physical complications; war (declared or undeclared), acts of war, military duty, civil disorder or unrest; participation in or training for any professional or amateur sporting competition; flying or learning to fly an aircraft as pilot or crew; nuclear reaction, radiation or radioactive contamination; natural disasters; epidemic or pandemic; air, water or other pollution or threat of pollutant release; unlawful acts; expected or reasonably foreseeable events or problems; financial default of a travel supplier; terrorist events; travel bulletins or alerts; and government prohibition or regulations."
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.
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, you might want to ask specifically about cruise coverage.
When to Buy Annual Insurance
Many insurance companies permit you to purchase 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, as an attempt to buy travel insurance to avoid problems due to a weather or other natural event that is already under way 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 any travel issues related to that medical condition, depending on when it developed and the length of your policy's lookback period.
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.
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