What an annual travel insurance plan covers

Annual travel insurance may save you money on protecting the multiple trips you take over the course of a year. Westend61/Getty Images

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• Annual travel insurance protects all of your trips within a one-year period.
• It provides medical coverage and reimbursement for damages like lost luggage and trip delays.
• Annual travel insurance generally considered less comprehensive than single-trip insurance.
• Compare travel insurance policies and quotes for free with SquareMouth.

Travel has started to bounce back after its steep pandemic decline. But that doesn't mean COVID-19 — or other potential snags — won't disrupt your travel plans.

Fortunately, coverage is available that can soften the financial blow if you get sick, lose your luggage, or experience some other hiccup while abroad. If you're taking multiple trips, you may want annual travel insurance, which covers all your trips throughout the year.

What is annual travel insurance?

Annual travel insurance, also called multi-trip insurance, is a type of insurance policy that protects you from potential losses on all trips in a 12-month period.

While there's no limit to the number of trips an annual travel insurance policy will cover, these plans do limit how long each covered trip can last. This threshold varies from provider to provider, but generally it's up to a maximum of 90 days.

"During the coverage period, a traveler can move between countries and remain covered on the same insurance policy," says Rajeev Shrivastava, chief executive officer at VisitorsCoverage, a travel insurance marketplace. "With 30-day coverage, the plan is no longer valid on day 31. The traveler needs to return to their home country — resetting the 30 days and allowing them to resume travel."

Annual travel insurance can be a smart option for regular travelers — those who travel for business, for example, or journalists who regularly cover assignments abroad. Rather than purchasing single-trip insurance for every trip, annual insurance covers them for all their travels.

Note: Some annual travel insurance policies only cover trips a certain distance (say, 100 miles) from your residence or farther. Make sure to note these limitations before purchasing your policy — particularly if most of your travel is domestic. 

What does annual travel insurance cover?

Annual travel insurance coverage varies by plan and provider, but it is generally less comprehensive than a single-trip travel insurance policy.

Annual policies typically include coverage for emergency medical care, medical evacuations, trip delays, and lost or stolen baggage. Most basic plans do not cover trip cancellations (though a few more comprehensive ones do). If you're looking for cancellation reimbursement, you may want to purchase a single-trip plan with cancel for any reason coverage.

Here are just a few things a basic annual travel insurance plan might include:

• Emergency medical expenses
• Medical evacuation
• Rental car damage or theft
• Trip interruption
• Lost or stolen baggage
• Missed connections
• Baggage delays

Depending on your provider, you may be able to add coverage for adventure sports injuries, as these are not covered by most policies.

"Annual travel insurance doesn't cover losses that arise from expected or reasonably foreseeable events," says Daniel Durazo, director of external communications at travel insurer Allianz Partners. "If your trips involve high-risk adventure — like skydiving, caving, mountain climbing, or participating in any athletic competition — your annual policy may not cover medical care if you sustain injuries."

Note: Some annual travel insurance policies will cover the costs associated with treating and diagnosing COVID-19 while traveling. Others may also cover cancellation due to getting the virus. Policies won't cover cancellation because of fears around getting COVID-19 on your trip. This would require cancel for any reason coverage. 

How much does annual travel insurance cost?

For a 30-year-old US resident taking an estimated eight trips per year, all for fewer than 30 days each, annual travel insurance plans cost roughly between $125 and $700, according to an analysis of plans on travel insurance comparison platform Squaremouth. Your age, the number of trips you plan to take, where you live, and other factors will figure into the cost of your coverage.

The plan's deductible and coverages will affect your cost, too. For example, a plan for a 30-year-old US resident taking eight trips in a year from Trawick International varies between $155 for the most basic coverage and $675 for the "annual executive" plan.

"The per-trip length of coverage is usually a determining factor of the cost," Shrivastava says. "The longer the trip duration, the more expensive the policy can be."

Note: With most providers, you'll need to pay for your policy in full at the time of purchase — you won't be able to pay in installments. 

When should you buy annual travel insurance?

Since annual travel insurance plans cover you for a full year, consider purchasing your policy right before your first trip. While this could help you stretch your coverage period to cover more travels, take into account the drawbacks of this approach.

First, you could forget. A lot goes into preparing for a trip, so leaving your travel insurance until the last minute could cause it to fall through the cracks. If you do opt to wait, make sure you set an alarm or calendar reminder.

Additionally, if you wait too long, your policy may not cover any pre-existing medical conditions. Some travel insurance companies will only cover pre-existing conditions if you buy your policy within 14 days of making your first trip payment.

As Durazo puts it, "Whether you're choosing an individual or annual policy, the best time to purchase insurance is always at the same time as you book your travel."

Advantages and disadvantages of annual travel insurance

Annual travel insurance isn't right for everyone, but if you travel often, it might be a good fit. Before you take out your policy, have an idea of what travels you'll take in the next year, and use the following chart to help guide your decision.

"These plans are ideal for frequent travelers such as business travelers, digital nomads, or other avid travelers," Shrivastava says. "They aren't a fit for travelers who are only taking one or two trips per year or someone looking for a more comprehensive range of benefits."