Shopping for annual travel insurance can be confusing for long-term travelers or those who take many frequent trips overseas.
I should know: I took a year-long trip to 43 countries around the world, and really struggled to decide whether to buy annual travel insurance for that RTW trip.
Whether you are looking for multi-trip insurance for a long journey around the world, gap year travel insurance for Spain, Mexico, Ireland, Greece, or just long-term travel insurance for your nomadic global lifestyle, there are plenty of annual travel insurance plans that will cover you for a pretty penny.
In this detailed guide we will cover the following topics:
- Do you really even need annual travel insurance?
- What does an annual trip policy cover?
- What are the best companies for annual or RTW trip insurance?
Let’s dive in:
Disclosure: I am not a licensed broker and cannot choose insurance for you. Be sure to read policy terms and conditions closely before making a purchase. Also please note that this is a reader-supported travel blog, so by purchasing through my affiliate links you help support our site.
Summary: the Best Annual Travel Insurance Policies
An annual travel insurance plan usually makes sense for those who don’t already have adequate coverage for catastrophic costs like emergency medical costs or for other risks you can’t afford to self insure.
Here are two places I recommend for pricing out a policy:
- TravelInsurance.com – Best site for comparing policies from a bunch of different companies.
- World Nomads – The company from whom I personally bought my 1-year RTW policy.
Ok, that’s the summary. Ready to dive into the full analysis?
What Annual Travel Insurance Covers (And Doesn’t)
Before you can decide whether or not annual travel insurance makes sense in your situation, it’s helpful to first briefly understand the sort of coverages that you might want to buy. While it depends on the specific annual travel insurance policy you choose, generally speaking, most companies will offer you the chance to purchase coverage for the following:
- Trip Cancellation, Interruption, and Delay – If you have to cancel or delay your trip because of a covered reason, travel insurance may cover you. You might be covered for prepaid and nonrefundable expenses, for example, if you are planning a trip but then have to cancel due to illness or the death of a spouse. Or you might have a claim to coverage if you have your trip interrupted or delayed for a lengthy amount of time by a natural disaster.
- Baggage Delay and Lost Luggage – If an airline loses your bags and you suddenly find yourself in Berlin with nothing but the clothes on your back, you may be able to submit a claim to your travel insurance company.
- Theft of Personal Effects – I try to pack as little as I can when I travel, but theft is always something to be concerned about (I was once burglarized in Belize). Depending on your coverage, you might be able to make a claim should this happen.
- Rental Car Damage – If you’re renting a car for that road trip across Tasmania, many insurance companies will allow you to buy either full or CDW coverage for damage to the vehicle should you get in an accident.
- Emergency Medical Expenses – Get in an accident while riding a bus in Laos? Get sick with some weird Bolivian fungus in the desert? Many policies will help cover emergency medical expenses you’ll incur. Note that a lot of policies exclude routine medical care, and that the difference between emergency and routine can be an important definition.
- Emergency Evacuation and Repatriation – Let’s say you come down with a severe illness while deep in the mountains of Svaneti, Georgia, and need to have a helicopter come to take you to medical care. If you bought travel insurance, you may be glad you did.
While it is possible to purchase insurance for other things, the above is a list of the most common coverages available in most annual travel insurance policies. Be sure to read any exclusions carefully, especially if you have a pre-existing condition, if you’re going to an unusual destination (e.g., Somalia), or if you are planning to engage in any dangerous or unusual activities (e.g., adventure sports, scuba diving, etc.).
Do You Even Need Annual Travel Insurance In the First Place?
Before you decide if an annual travel insurance policy is right for your situation, it helps to briefly understand what travel insurance is and why you might want to buy overseas travel insurance.
First, as a general financial principle, insurance is something that you should only buy to cover risks that you can’t self-insure.
What does that mean? Well, think of it this way: if the bad thing that is covered by the insurance comes to pass, can you afford to pay for it without seriously damaging your financial health?
If the answer is yes, then the insurance probably isn’t a good deal for you.
For example, think about an extended warranty plan on a new toaster. That’s essentially just insurance in case something bad happens — e.g., the toaster breaks after its original warranty.
But you know what? If a toaster breaks, you can probably afford to buy a new one!
And, though if that actually happens, you’ll be marginally financially worse-off than if you had bought the insurance, you probably won’t actually need the coverage and you’ll have spent that money for nothing. Over the long run of your life, you’re likely to save money by taking a pass on all the extended toaster warranties out there (not to mention other appliances, cell phones, cars, etc) and just self-insuring against accidents.
So what does that mean for travel insurance?
Well, think about the coverages we just discussed above. A lot of those things are stuff you can probably self-insure! If your baggage gets delayed on your flight to Berlin, you can probably afford to buy an extra pair of clothes and some toiletries to hold you over until it arrives, right?
And if someone steals your GoPro in Egypt, is it really going to break the bank to have to buy a new one?
And if you have to change your flight because of a hurricane, can you just eat the cost (which may well be covered by the airline anyway)?
In short, a LOT of the things that travel insurance companies try to sell you are on simply not the sort of services that make good candidates for insurance coverage. Just like it doesn’t make sense to spend your life buying extended toaster warranties, a long-term traveler will probably save money over the long-haul by self-insuring for de minimus risks like baggage delays, and trip interruption.
That’s why I don’t put too much stock in these sort of coverages when I shop for travel insurance.
Reasons to Get a Year-Long Travel Insurance Policy
Setting aside the fact that many annual travel insurance companies try to sell you on relatively small and unimportant benefits, there are a few other reasons that you might not need overseas or multi-trip travel insurance, depending on your circumstances:
1. You might already have enough travel insurance without even knowing it.
How? Well here are some ways you may already have full or partial overseas travel insurance:
- Does your health insurance policy cover medical expenses incurred abroad? Health insurance is a huge cost, and a big part of the reason I choose to buy trip insurance (see below). But it’s possible you’ll be covered already through your existing health insurance (it varies by each policy and each country’s system — and I sometimes wonder if this is why Americans seem to get higher quotes for travel insurance than Europeans). If you are, be sure to ask exactly what is covered to understand your risks. But you may find that the coverage offered is enough to mean that you don’t need an additional annual travel insurance policy.
- Do you have insurance through your employer or university? If you’re traveling abroad for work or as part of a school or university-sponsored program, it’s possible you already have some form of travel insurance. Be sure to check with your employer or school before shopping for policies.
- Does your homeowner’s insurance or car insurance cover you? It may come as a surprise, but many home and auto insurance policies provide certain forms of coverage abroad. It’s possible your homeowner’s insurance policy covers theft at your hotel in Paris, for example, or that your auto policy still applies to a rental car in Sydney.
- Do you have a credit card with travel insurance benefits? Many credit cards provide limited travel insurance for things like rental cars, lost luggage, or trip cancellation. A handful even provide some (albeit usually limited) medical insurance benefits.
As always, it’s best to check with your insurance company in each of these situations, but the point is that for many people annual travel insurance is partially or even wholly redundant to coverages you already have.
2. Annual travel insurance may not help even if you end up needing it.
Depending on your circumstances, you may not see much benefit from travel insurance even if you have to file a claim.
For example, many travel insurance plans exclude pre-existing medical conditions. If you’re in the unfortunate situation of needing medical care for that condition, you’re probably not going to get any benefit out of the travel insurance.
Travel insurance also is generally only secondary to other coverages. So if an airline loses your bags or your flight is canceled, your travel insurance company is probably going to require you to first ask your airline for assistance.
You also need to consider deductibles. If you have a $150 emergency medical bill to treat a stomach bug in India, but your annual travel insurance policy has a $1,000 deductible, you’re not going to get much benefit out of the policy.
In short, travel insurance isn’t a cure-all for everything that may come up traveling. Considering that annual travel insurance can easily run over $1,000 USD — and that most people will never actually make a claim under it — it’s worth really thinking hard about whether or not you need it.
The One Reason I Got Worldwide Travel Insurance for My Gap Year
So far it sounds like I’m pretty down on the value proposition of overseas travel insurance. So why then did I decide to fork over the money for an expensive annual travel insurance policy for my gap year overseas?
There is one reason and one reason only that I bought annual travel insurance:
Medical and evacuation bills incurred while traveling overseas can be catastrophic.
Like, really, truly, life-altering, catastrophic.
This isn’t a fun game to play, but you have to think about the worst outcomes you might face while traveling:
You could break a leg hiking on a glacier near Juneau and need a helicopter to evacuate you out.
You could get bitten by a rabid dog in Bali and need to fly to Singapore for life-saving and pricey treatment.
Perhaps most likely, you could be severely injured in a car wreck (it happened to me once in my life already!) and need costly emergency care.
Or, in the tragic event that you pass away while traveling, your family could be saddled with enormous costs to repatriate your remains.
None of these things are fun to think about. But they are even worse to think about when you consider the consequences of enduring one of these tragic events while uninsured.
And remember what I said above about buying insurance? You should only do it to cover things that you can’t self-insure for. And, ultimately, that’s what compelled me to purchase a travel insurance policy before spending a year traveling the world: I simply couldn’t think of another way to guard against the potential financial ruin of an uninsured tragic medical event.
Where to Find an Annual Travel Insurance Policy
There are a lot of travel insurance companies out there, and I spent a lot of time comparing prices and coverages from many of them. Ultimately I chose to buy through World Nomads for a couple simple reasons:
- First, they offer worldwide coverage. This isn’t relevant for everyone, but a lot of travel insurance companies won’t provide protection for certain areas of the world. Since I was going to 40+ countries in a single year, this was critical.
- Second, they make it very easy to extend or modify your coverage online while traveling. If you decide to extend your trip, it’s really easy to extend your coverage.
- Third, they offer several reasonable coverage limits for the thing that matters most to me – catastrophic medical coverage.
If you’re looking for a travel insurance, definitely check out World Nomads.
Thankfully, I’ve never needed to make a claim, but I’m still glad I made the purchase if not just for the peace of mind. I’ve continued to purchase single trip insurance from World Nomads even after that long annual trip.
But I’m also curious to hear other traveler’s experiences with annual travel insurance. Do you use it? Have you ever had to file a claim? Let me know in the comments so other travelers can make an informed decision about whether or not to purchase travel insurance.