What is annual travel insurance?
Annual travel insurance - also known as multi-trip travel insurance - covers holidaymakers who take more than one foreign excursion per year. Instead of buying separate cover for every trip you take, you buy one policy that covers every holiday in a 12-month period.
How much is annual travel insurance?
An annual travel insurance policy is more expensive than single-trip cover, but is likely to be cheaper overall if you take three or four more holidays in a calendar year.
Costs vary according to which part of the world you are travelling to - Europe, the rest of the world, or the rest of the world minus North America. You should also expect to pay more the older you are; according to MoneySuperMarket data from March 2019, people under the age of 25 pay less than £23 on average for a multi-trip policy. Once you get into your mid 30s and above, you should expect to pay £40 or more. There's another leap when you retire, when you can expect to pay £65 or more on average.
How does annual travel insurance work?
Annual travel insurance works for all intents and purposes like regular travel insurance, with a couple of caveats. You buy the same level of cover as a single-trip policy, but it works across multiple trips. Most insurers impose a time limit on each individual trip, however, which is generally 31 days, though some policies allow for 60 days.
Likewise, you still need to pay for the usual extras should you need them, such as winter or extreme sports cover. Otherwise, you make claims as usual.
Why is annual travel insurance cheaper than single?
Annual travel insurance can work out cheaper for people who take lots of short trips in a single year. It's cheaper in the same way that buying goods in bulk is cheaper: even though your insurer's profit per unit (ie each trip you take) is lower, they're guaranteed more money up from, while your chances of making a claim do not really increase.
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