Planning to buy annual travel insurance next year?
For Debbie Winsett, who plans several trips to Israel next year, it comes down to simple math. If she had to insure each trip individually, she’d pay thousands of dollars. But she’ll be leading several tours to the Holy Land in 2021, and there’s a more efficient, and less expensive, insurance option for that. It’s a single policy that covers everything.
“I love knowing it would cover weekend trips I might need to cancel, or random other travel throughout the year,” she says.
Winsett is part of a trend to buy annual travel insurance next year.
“We are now seeing a big shift in the market,” says Sasha Gainullin, CEO of battleface, a travel insurance site. “Annual and multitrip policies are becoming more and more popular.”
Annual travel insurance? What’s that?
Annual travel insurance plans protect all your trips for a year. A typical annual policy covers health expenses, property, and the cost of your trip. It can save you a lot of money, compared to buying several single-trip policies.
But there are also significant limitations. For example, many plans don’t cover a cancellation. Whether or not an annual travel insurance policy is right for you depends on how often you travel and the types of coverage you need.
Here’s my comprehensive guide to buying travel insurance, which will give you all the options.
Check policies for cancellation coverage
Stan Sandberg, co-founder of TravelInsurance.com, recommends you buy annual travel insurance next year if you’re planning four or more trips.
“Most annual plans will cost more than a standard single-trip plan, so they won’t be cost-effective for travelers making just one or two trips per year,” he says.
But he cautions that annual plans may not cover everything you need, particularly in the wake of the pandemic.
“Annual travel medical plans don’t typically offer any trip protection against an unexpected cancellation,” he says.
Recently, insurance carriers have introduced annual plans that also incorporate trip cancellation and interruption coverage. For example, April Travel Protection’s annual plan offers between $1,000 and $5,000 of trip cancellation and trip interruption coverage.
Does an annual travel insurance policy really work all year?
A typical annual travel insurance policy includes many of the same coverages as a per-trip policy. For example, Allianz’s basic annual product, AllTrips Basic, offers:
Emergency medical for losses resulting from covered medical and dental emergencies that happen during your trip. There’s no deductible (up to $20,000).
Emergency medical transportation for medically necessary transportation after a covered illness or injury (up to $100,000).
Baggage loss or damage for or theft of baggage and personal effects (up to $1,000).
Baggage delay for reimbursement of essential items during your trip if your baggage is delayed or misdirected by a carrier for 24 hours or more (up to $200).
Travel delay for reimbursement of eligible expenses because of a covered delay of six hours or more (up to $600).
Rental car damage if a car you’re renting is stolen or is damaged in an accident or while it’s left unattended (up to $45,000).
Travel accident coverage, which covers a cash payment for covered losses due to death, loss of limbs or sight as a result of a covered travel accident (up to $25,000).
Here’s how to know whether an annual plan is right for you
Annual travel insurance didn’t disappear during the pandemic, but you could be forgiven for thinking so, says Rajeev Shrivastava, CEO of VisitorsCoverage.
“There isn’t much focus on annual policies during this pandemic,” he says. “That’s primarily because of uncertainties related to lockdowns and quarantines, and because many people simply don’t have enough forecasted information to make long-term travel plans with so many variables affecting travel right now due to COVID.”
But that’s expected to change as more people start to travel next year.
What is new for 2021 with travel insurance?
The annual travel insurance policy market hasn’t changed that much since the pandemic, with one or two exceptions. Take my annual travel insurance policy, for example. When I renewed in July, it cost exactly the same as it did the year before. The coverage was identical.
“We haven’t seen many changes to annual policies following the pandemic,” says Megan Moncrief, the chief marketing officer for the travel insurance site Squaremouth.com. “However, we have had one provider bring a new annual product to the market including coverage for contracting COVID-19, which was excluded by their regular annual plan.”
That’s a welcome addition for travelers like Ava Roxanne Stritt. She has three international trips planned in the next few months. She wanted to buy an annual policy, but “I only hesitated due to worries about coverage,” she says.
Last year Stritt, who writes about health spas, relied on her credit card coverage for insurance. But the complexities of the pandemic have made her consider an annual policy for 2021.
Will annual travel insurance next year cover you for COVID-19?
One of the most common questions travelers have is: Will an annual travel insurance plan cover me for COVID-19? Generally, no.
“A person looking for trip cancellation coverage due to a pandemic should not purchase an annual plan,” says Dan Drennen, director of sales and marketing at Travel Insurance Center.
The travel insurance that would cover you — a “cancel for any reason” policy — isn’t available on an annual basis.
“The optional cancel for any reason coverage is only available on certain single trip plans and is the only option that provides some trip protection — up to 75 percent of the trip cost — should someone cancel their trip due to COVID-19 related reasons such as country closures, government regulations or government mandates,” he says.
Are there alternatives to annual travel insurance?
Yes, there are, says Joey Levy, a travel advisor for Embark Beyond. He bought an annual Medjet medical evacuation membership to cover his family in 2021. Medjet fills in some of the gaps left by traditional insurance. It covers some medical evacuations that might result from a COVID-19 infection, for example.
“There’s a lot of comfort in knowing that should the worst happen, I will be able to be transported to the medical facility of my choice,” he says. “Since the policy kicks in whenever you’re over 150 miles from home, we are covered on road trips as well as my daughter, who is away in college.”
Is annual travel insurance right for you?
It depends. If you have fewer than four trips planned for 2021, consider an individual policy. You’ll come out ahead by separating your insurance purchases. You may also get broader coverage. (Here’s my unofficial buying guide for travel insurance.)
“If you compare the cost of comprehensive travel insurance plans covering each of your trips, you may find that they cost the same as the annual insurance plan, but give you more coverage features and cover more of the risks, particularly trip cancellation,” says Dan Skilken, president of Online Trip Insurance Services.
But if you’re taking more than four trips and don’t need all the coverage of traditional travel insurance, or a “cancel for any reason” policy, then an annual policy might be in your future.
Christopher Elliott is the founder of Elliott Advocacy, a 501(c)(3) nonprofit organization that empowers consumers to solve their problems and helps those who can’t. He’s the author of numerous books on consumer advocacy and writes weekly columns for King Features Syndicate, USA Today, and the Washington Post. If you have a consumer problem you can’t solve, contact him directly through his advocacy website. You can also follow him on Twitter, Facebook, and LinkedIn, or sign up for his daily newsletter. Read more of Christopher’s articles here.