Is Annual Travel Insurance Worth It?
If you’re a frequent traveler, you may be wondering if an annual travel insurance plan is a smart idea.
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Travel has gotten more expensive over the past few years. This, combined with increased weather events, staffing issues, and other snafus, has led to more flight delays and general airport chaos.
Unlike a standalone travel policy, which covers you for a single trip, annual travel insurance typically covers an unlimited amount of trips throughout the year. Here’s what you need to know about annual travel insurance, including the pros and cons, to decide if it’s worth purchasing.
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What is Travel Insurance?
Travel insurance protects you from unexpected travel delays, canceled flights, or lost baggage. It includes things like:
Health insurance: Your policy may cover your medical bills and other health expenses if you get injured or sick while traveling.
Baggage insurance: If your baggage is lost or delayed during your trip, your policy may cover the cost of replacing your items.
Trip interruption: If something happens during your trip and you unexpectedly need to change your plans, your policy may cover the cost to do so.
Trip cancellation: Life happens, and if you unexpectedly need to cancel your trip, your travel insurance policy may cover the cancellation cost. Keep in mind many annual plans don’t offer this coverage.
Travelers spent an average of $403 for comprehensive travel coverage and $96 for medical-only policies, according to Squaremouth. But keep in mind that there are many different policy options with different tiers of coverage. The more coverage your policy has, the more expensive it will be.
Standalone Travel Insurance vs. Annual Travel Insurance
There are two main types of travel insurance — single-trip and multi-trip, known as annual travel insurance.
As the name suggests, annual travel insurance covers all your trips in one year (unless the policy expires or you reach the maximum payout).
Most policies cover trips you take that are a certain amount of miles from your home (like 100 miles or more). On the other hand, single-trip travel insurance policies are purchased for each trip, covering you from the start to the end of your journey.
Annual travel insurance focuses more on providing medical coverage while traveling. This includes covering medical bills, medication, hospitalization, emergency transport, and more.
Single-trip plans typically have more comprehensive coverage than annual plans. Most annual travel insurance plans won’t include baggage loss or rental car coverage. Some may also not cover trip cancellations or may charge you extra for that coverage.
The Benefits and Drawbacks of Annual Travel Insurance
Some of the benefits of getting an annual travel insurance policy include:
Cost-effective: If you travel multiple times in one year, purchasing an annual plan over several individual travel insurance policies is often cheaper.
More straightforward: You essentially need to buy the policy once and get peace of mind knowing you have coverage for an entire year — no matter where you go. You also typically don’t need to have all of your trips booked before purchasing a policy.
But there are some drawbacks to keep in mind, including:
Limitations: Many annual travel insurance plans will have restrictions on what’s covered. Most don’t cover trip cancellations or trip interruptions.
Expensive upfront cost: While an annual policy may be cheaper than purchasing a bunch of single policies, you must shell out a higher upfront cost at the beginning of the year.
Should You Get Annual Travel Insurance?
When deciding what type of travel insurance to get, you’ll want to consider how often you travel and your trips. It also matters if you regularly travel out of the country (where your U.S. health insurance policy won’t cover you).
Single-trip travel insurance is often better for those who are only taking a few trips in a year or are going on a short journey. But if you’re planning multiple trips in one year, getting an annual travel insurance policy may be a good idea, says Besart Bajrami, Founder of VisaGuide, an online guide to travel visas.
It’s ideal for frequent travelers who take multiple trips within a year, as it offers continuous coverage without the hassle of purchasing separate policies each time,” he says. “If you’re someone who travels multiple times a year, it’s likely a good investment due to the convenience and potential cost savings compared to buying separate policies for each trip.”
Remember that some annual travel insurance policies have limitations, like how often you can travel and the duration of your trips. For example, some policies limit your trips to 60 or 90 days at a time.
Plus, because annual plans have less comprehensive coverage, it may be worthwhile to purchase an individual policy if your trips have lots of logistics that could go wrong.
“If you travel 6+ times a year, then most of the time, it [annual travel insurance] is worth it cost-wise,” says Justin Albertynas, CEO of RatePunk, a hotel rate comparison website. “I also recommend considering annual travel insurance for those who tend to chase last-minute deals and travel unexpectedly for work or leisure.”
Credit Card Travel Insurance vs. Annual Travel Insurance
You may have some travel insurance protections if you have a travel credit card. Depending on your card, you may have some coverage for flight delays, disruption, and lost baggage. Others may also include rental car insurance.
However, most cards only cover flights or rental cars booked on that card and limit their coverage typically between $1,500 and $10,000 per trip. For some travelers, viewing credit card travel insurance as supplemental coverage may be better.
If you want more comprehensive coverage, you may want to consider purchasing a standalone travel insurance policy, whether that be single-trip or multi-trip coverage.
At the end of the day, you’ll want a travel insurance policy that gives you peace of mind and protects you when you need it the most.
“Getting annual travel insurance reduces unexpected costs, so you can enjoy your spontaneous trips with less of a headache,” says Albertynas. “Also, you don’t have to go through the insurance handling process every trip, which saves you time!”
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This article originally appeared on GOBankingRates.com: Is Annual Travel Insurance Worth It?
