Here’s How to Get a Travel Insurance Policy That Makes Sense

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. Before you buy, you have to run a few numbers and read the fine print.

A case study

Consider what happened to Gary Arndt when he embarked on an open-ended 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 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 who publishes the travel blog Everything Everywhere, went with the annual policy. And although he doesn’t travel full time anymore, he has kept his coverage.

“Overall, an annual policy is a fantastic deal for anyone who does multiple international trips per year,” he says.

So should you buy an annual policy? Maybe.

Focus on medical 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 trip 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 website Travel Insurance Review.

“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 any cancellation benefits. Rather, it offers emergency medical transportation, an auto rental collision damage waiver and accident coverage. Several travel insurance 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.

Read the fine print

Another limit: trip length.

“Buried in the fine print, it states that a single trip during the calendar year is limited to a 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 you 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.”

Adventurers beware

You might also run into a problem if you have an appetite for adventure.

“If you’re taking business trips, visiting Grandma and taking the occasional family trip, cruise or all-inclusive stay, you may be OK,” says Margie Jordan, who works for a travel agency in Jacksonville. “But 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 more importantly, what it doesn’t.”

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. That’s a strategy Carl Lehman uses. He purchases an annual policy but then adds extra policies as needed.

“I have an annual policy for unlimited trips under 40 days each,” explains Lehman, a retired audit manager for the Canadian government. “I can purchase additional coverage for any extended trip.”

Worth a look?

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. “I wouldn’t leave home without it,” says Michelle Weller, a travel agent with Travel Leaders in Houston.

Neither would I.

How to shop for travel insurance

• Take a quick inventory of your upcoming trips. In most cases, the cost of a single insurance package is less than half the cost of an annual package, according to Stan Sandberg, co-founder of TravelInsurance.com, a travel insurance comparison website. That makes single-trip insurance the logical choice for anyone who plans to take two vacations or less per year.
• Compare, compare, compare. In addition to TravelInsurance.com, you can easily compare policies on sites such as InsureMyTrip.com, Quotewright.com, Squaremouth.com, TripInsurance.com and TripInsuranceZone.com. Because annual policies are such a niche product, you sometimes have to search for a while to find an annual policy. This primer on Travelinsurancereview.com may be helpful.
• Check to see if you’re already covered. That’s the advice of Joel Ohman, a financial planner who founded the site InsuranceProviders.com. “You could potentially end up buying a policy that has some duplication of benefits with what you already have,” he says.

Christopher Elliott’s latest book is “How to Be the World’s Smartest Traveler” (National Geographic).

© 2018 Christopher Elliott.