Annual travel insurance policy may be best bet, but read the fine print
If you’re thinking of buying a travel insurance policy for your summer vacation, here’s a thought: Why not get one for the whole year?
If you take more than two trips in
2018, you could save money by choosing an annual policy instead of insuring each trip separately, experts say. But most annual coverage comes with significant restrictions and limitations, and it can be difficult to find.
Consider what happened to Gary Arndt when he embarked on an openended trip around the world more than a decade ago. First, he priced a regular policy, which would have cost somewhere between $114 and $204 per segment, depending on the length and type of coverage. An annual policy, by comparison, cost $459.
“Assuming I had a series of one- to two-week policies that I had instead of an annual policy, I would have had to pay anywhere between $2,000 to
$5,000 per year for the same coverage,” he says.
Arndt, a professional photographer, went with the annual policy. And although he doesn’t travel full-time anymore, he has kept his coverage.
Annual policies differ from typical travel insurance purchased on a per-trip basis in at least one important way. They tend to focus on medical coverage, as opposed to cancellation benefits. That’s because it’s difficult for insurance underwriters to know how much you’ll spend on your trips, and they are trying to limit their exposure, according to Damian Tysdal, who publishes the site Travelinsurancereview.net.
“An annual plan might be right for you if you are taking multiple trips throughout the year, especially abroad where you will need medical coverage, but cancellation is not your primary concern,” he says.
For example, the basic version of Arndt’s annual policy doesn’t have cancellation benefits. It offers emergency medical transportation, auto rental collision damage waiver and accident coverage. Several companies, including Allianz Travel Insurance, HTH Worldwide, International Medical Group, RoamRight, Seven Corners and Travel Guard, offer annual policies. You can pay extra for additional cancellation coverage.
Another limit: trip length. “Buried in the fine print, it states that a single trip during the calendar year is limited to maximum 45 days duration,” says Jeffrey McElwee, who works for a tour operator in Nampa, Idaho. “So, you might think you have a year’s worth of coverage but need to coordinate trips to fit the fine print details. Even if you get sick within the 45-day limit, if your planned itinerary was longer than the 45 days, they will still refuse payment.”
You also might run into a problem if you have an appetite for adventure.
“If you like to add in a little adventure, like ziplining, scuba diving, hiking, white water rafting or just like to travel deeper, you might want to explore what your annual policy covers — and what it doesn’t,” says Margie Jordan, who works for a travel agency in Jacksonville.
Regular travel insurance has those restrictions, too, plus limits on coverage for pre-existing medical conditions. Sometimes you have to get extra insurance to address those gaps.
As a travel writer, I spend 365 days a year on the road and have no permanent residence. So an annual policy was a clear choice. I went with one that offers a modest $5,000 in trip cancellation and trip interruption benefits. It also provides my family with $50,000 in emergency medical and dental coverage and $250,000 in emergency medical transportation.
Some of my travel purchases are also covered through my Visa card. My primary health insurance covers us for health care domestically.
Even with all of the restrictions, the travel professionals I spoke with were unanimous that an annual policy is worth a look.