All you need to know about annual travel insurance policies
Quick summary
As demand for travel soars and everything from weather to staffing issues leads to higher prices and cancellations, it's more important than ever to protect your trip arrangements with travel insurance.
However, it's not always easy figuring out which type of plan to pick. There are standard policies that cover general delays, interruptions and cancellations; "cancel for any reason" plans that account for personal whims in addition to unforeseen circumstances; and lesser-known annual options.
In this article, I'll go over what you need to know about the third type: annual travel insurance coverage.
What is annual travel insurance?
Annual travel insurance plans (also known as multi-trip plans) last for one year and generally cover all trips taken within that period until either the policy expires or the maximum payout amounts are reached. The policy usually kicks in for trips that take you more than a certain distance from home.
For example, my Allianz AllTrips Prime annual plan remains in effect for one year following the purchase date of my policy. I'm covered on all trips during which I'm at least 100 miles from my residence.
This differs from standard travel insurance, which is purchased on a per-trip basis and covers only one specifically insured journey per policy. Standard policies begin when travel for the insured trip begins and end when the insured trip ends, rather than covering multiple travel experiences within a specific period of time.
What does annual travel insurance cover?
Coverage depends on the plan you purchase. There are usually several tiers from which to choose, with the lowest offering the least coverage and the highest offering the most.
Using my policy as an example, I'm covered for up to $3,000 per year in trip interruption expenses, including hotel room coverage at $250 per night, which I used when I was recently isolated for 10 days after testing positive for COVID-19.
My policy also offers a $3,000 annual trip cancellation benefit, $20,000 in emergency medical coverage, $100,000 in emergency transportation (including medevac services), $45,000 in rental car theft and damage protection, $25,000 in travel accident coverage and $1,000 for essentials in the event of baggage loss or damage, along with a handful of other small benefits.
Note that many annual policies do not include things like "cancel for any reason" coverage or trip interruption benefits. If those items are important to you, check with your provider before making a purchase.
How much is an annual travel insurance policy?
Sure, an annual travel insurance policy may sound great, but how much does one cost? I was surprised to find that insuring your trips for a whole year with an annual policy is often not much more expensive than insuring one or two trips individually, depending on the options you select.
A decent annual travel insurance plan will likely set you back a couple hundred dollars. The more coverage you add, the more expensive the plan will become. The cost also changes depending on variables like your age and where you live.
The best thing to do is contact your preferred provider for a quote or check out an aggregator like InsureMyTrip to compare premiums.
Which companies offer annual travel insurance plans?
The Points Guy recommends the following travel insurance providers, all of which sell annual or semi-annual policies:
When should I purchase annual travel insurance?
There are several reasons why annual travel insurance might be better for you than separate policies for individual trips. If you travel a lot — more than two or three times annually — it could be more cost-effective than purchasing separate policies for each journey.
For me, it makes sense because I travel for a living, often taking a dozen or more trips each year. Also, much of my travel is comped, which makes insurance more difficult to acquire. (If I haven't paid for a cruise, flight or hotel, I can't attach a dollar amount to it and, therefore, often can't insure it. I also wouldn't be able to provide purchase receipts in the event something went wrong and had to file a claim.)
Other factors to consider include your health, how adventurous your travels might be, whether you have coverage as a credit card perk and how much your travel arrangements cost versus how much coverage you can get with an annual plan versus individual policies.
Another consideration right now is COVID-19. For me, the annual plan made sense because most of Allianz's individual plans don't cover issues linked to COVID-19. However, the annual coverage I purchased does.
Other things to know about annual travel insurance policies
Here are a few additional tidbits I learned after filing a trip interruption claim under my annual travel insurance policy. Keep them in mind when deciding if an annual policy is right for you.
- Before committing to the purchase of any travel insurance plan, make sure to inquire about specific components that are important to you. For me, those were COVID-19 coverage, trip interruption benefits and medevac coverage.
- Know that your coverage does not reset each time you travel when you opt for an annual policy. So, if you have a trip that goes awry, you file a claim and you max out the benefit allowed by your plan, you won't have that benefit available to you for the remainder of your policy year.
- Depending on your policy, you might have to return home between travel sessions in order for each trip to be covered. Taking several back-to-back trips could prevent them from qualifying for coverage under your annual insurance plan, so be sure to read the fine print, and plan accordingly.
- If you purchase annual or multi-trip travel insurance, keep your policy card and provider phone number with the other important documents you bring when you travel so they're easily accessible in a pinch.
- If you find yourself in a covered situation for which you'd like to seek reimbursement, keep all receipts and take photos that will help to support your claims when they're submitted.
- Don't assume all your expenses will be reimbursed, even if you think they'll be covered. It doesn't hurt to try, but in my case, my Allianz plan only partially covered the hotel expenses I submitted.