How Annual or Multi-Trip Travel Insurance Works

How Does Annual Travel Insurance Work?

Annual travel insurance normally covers your travels over the course of 12 months and puts no cap on the number of trips eligible for benefits. These trips may include cruises, tours, road trips, business trips, overseas vacations and weekend getaways.

Annual travel insurance is geared primarily toward covering medical emergencies that happen while you're traveling during the 12-month coverage period, according to Squaremouth, a travel insurance comparison site. But this coverage might also apply to circumstances such as travel delays and baggage delays.

Unfortunately, annual travel insurance generally doesn't offer blanket protection. For instance, Allianz, a provider of travel insurance, places these restrictions on what qualifies for its coverage:

• You must travel more than 100 miles from your home.
• In most cases, your policy will cover trips up to 45 days. (Coverage for shorter or longer durations is generally available from travel insurers.)
• Trip interruption benefits carry annual limits for all trips combined.

Learn more: What Does Travel Insurance Cover?

When Does Annual Travel Insurance Coverage Take Effect?

Typically, annual travel insurance coverage takes effect on the date you purchase the policy and lasts for 12 months. During that period, you should be able to take an unlimited number of trips and be covered by a single travel insurance policy, rather than purchasing separate policies for each trip.

If something goes wrong on a trip during the policy's 12-month window—one of your bags is lost or your spouse becomes ill, for example—you can file a claim with the provider of your annual travel insurance. As long as the type of incident is covered by your policy, you meet all of the policy's requirements and you submit requested documentation (like airline tickets and medical records), you should be reimbursed for trip expenses that aren't eligible for a refund.

Keep in mind that annual travel insurance might not be available in your state.

Tip: Annual travel insurance often doesn't include coverage for a canceled trip or a preexisting medical condition, but you should be able to find insurers that make exceptions.

What Does Annual Travel Insurance Cover?

Annual travel insurance covers a variety of travel expenses. Here are examples of scenarios that may qualify for reimbursement.

• Emergency medical care: This benefit reimburses you for covered health expenses in the event of an injury or illness that's covered by the policy.
• Emergency evacuation: This benefit kicks in if you need to be transported by helicopter, for example, if you've suffered a covered injury or illness.
• Baggage loss and damage: If your luggage is misplaced or damaged by an airline or another travel company, or if it's been stolen, this benefit helps pay costs related to the incident.
• Baggage delay: This benefit pays you back for eligible necessities that you must buy when your luggage has been delayed.
• Travel delay: If you've experienced a covered travel delay, this benefit can reimburse you for eligible meals, accommodations and other costs incurred during the delay.
• Travel accident: This benefit can pay you for covered losses arising from death, loss of a limb or loss of sight during a covered travel accident.

Single-Trip vs. Multi-Trip Travel Insurance

Let's take a look at how single-trip and multi-trip travel insurance compare.

How Much Is Annual Travel Insurance?

The premium for an annual travel insurance policy typically ranges from $100 to nearly $1,700, according to Squaremouth. On average, the cost is $338.

The following factors can affect the price of annual travel insurance:

• Total trip costs: If your policy offers trip cancellation or trip interruption benefits, total trip expenses will affect the cost of coverage. So, if you're planning a two-week, first-class vacation, you'll likely end up paying more for coverage than if you're hopping in your RV for a four-day excursion.
• Number of travelers: If you're a solo traveler, you'll likely pay less for annual travel insurance than a family would. Why? The more people who are traveling, the higher the odds are that the travelers will encounter turbulence.
• Policy type: The type of plan you buy will affect how much you pay for annual travel insurance. For example, you'll pay less for Allianz's standard option, AllTrips Basic, in part because it lacks trip cancellation coverage. But the company's highest-tier plan, AllTrips Premier, comes at a higher price because it includes trip cancellation coverage.
• Differences in provider pricing: Every insurer uses different calculations for coming up with the premium you pay for coverage. Therefore, identical coverage might cost more at one insurer and less at another.

Insurers normally charge a single premium for an annual insurance policy. Before the policy expires, a policyholder should be able to renew the coverage for another 12 months.

Is Annual Travel Insurance Worth It?

As a rule of thumb, consider annual travel insurance only if you take at least three to five trips per year. It also might be beneficial if you want to:

• Avoid the hassle and cost of buying coverage for each trip you take
• Cover your entire household
• Take spur-of-the-moment trips and be assured of having coverage
• Enjoy the freedom of extending a trip without worrying about travel insurance
• Frequently travel to other countries

How to Choose Between Annual Travel Insurance Plans

Deciding which annual travel insurance plan to buy is similar to choosing home or car insurance. You need to weigh several factors before signing up for coverage. Here are five tips for purchasing annual travel insurance.

1. Compare quotes. Obtain quotes from several insurance companies, and read online reviews of the companies you're looking at to get a sense of their reputation. By shopping around, you can find the best price for the coverage that meets your needs.
2. Consider your travel frequency. If you travel at least three times a year, an annual travel insurance policy might be worth the money. Otherwise, you may want to settle for single-trip travel insurance.
3. Watch out for exclusions. Two exclusions to check for are whether an annual travel insurance policy does not cover trip cancellations or preexisting medical conditions.
4. Look for add-ons. Some insurers offer annual travel insurance add-ons that you may want to explore. These include cancel for any reason (CFAR), adventure travel and pet coverage.

Can You Cancel Annual Travel Insurance?

You can cancel annual travel insurance and get a full refund. However, you must cancel the coverage during what's known as a "free look" period or "money back guarantee" period. This period normally is 10 to 15 days from the time you bought the coverage.

Frequently Asked Questions

The Bottom Line

Are you a global jetsetter? Do you frequently travel for work? If so, you might want to look into annual travel insurance. Annual travel insurance, also known as multi-trip travel insurance, can be a wise investment for people who take several trips per year. This coverage can be a lifesaver in situations such as travel delays and medical emergencies, enabling a policyholder to be reimbursed for nonrefundable travel expenses associated with eligible incidents.