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How Annual Travel Insurance Could Save You Money

SmarterTravel

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.

Pros:

– Convenience: Buying travel insurance is just another hassle of the trip planning process, and having to do it only once per year will 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).

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.

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 U.S. domestic trip with Allianz Global Assistance, 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 $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:

AllianzTravelInsurance.com
HTHTravelInsurance.com
IMGlobal.com
SevenCorners.com
TravelGuard.com
TravelInsure.com

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. In many cases, it might feel like there are more exclusions than inclusions. For example, Allianz excludes pre-existing medical conditions, intentional self-harm, suicide attempts, pregnancy (unless there are complications), fertility treatments, childbirth, elective abortion, mental or nervous disorders, use or abuse of alcohol or drugs, epidemics, pandemics, war, nuclear reaction, unlawful 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 things like trip interruption due to health problems or flight delays, damaged rental cars, delayed or lost suitcases, and emergency medical evacuation.

Cruise Insurance

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. 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.

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