Annual travel insurance gives a traveler the same global coverage for a full year from the start date. Essentially, it’s a travel insurance plan that goes with you whenever and wherever you travel – all year long – and you only have to buy it once a year.

Some annual travel insurance plans are renewable, so if it works for you one year, you can renew the plan and keep the same coverage.

Familiar Benefits in Annual Travel Insurance

Annual travel insurance is convenient for frequent travelers, academics, retirees, and entrepreneurs who are not worried about trip cancellations but do want to control unexpected travel costs due to:

• Emergency medical care – when you find yourself dehydrated and fighting food poisoning during a Beijing business trip
• Travel delays – when a tornado cancels all flights and you need a place to sleep
• Lost baggage – when your checked bags never arrive and you need to replace those lost items
• Evacuations – when the political situation on the ground worsens and you want a secure evacuation to a safe place
• Return of dependent children – when your family comes along and you are hospitalized, your children will be flown home
• Bedside visit – when you’re hospitalized in a foreign country, a friend or family member will be brought to your bedside

Annual travel insurance includes the travel insurance provider’s 24/7 emergency travel assistance services for help with medical emergencies, pre-trip planning, and other incidents that occur during your trips.

Limitations of Annual Travel Insurance

Most annual travel insurance plans have a per-trip length limit – usually 70-90 days. The key difference between annual travel insurance and other travel insurance plans is that there is little to no trip cancellation coverage, which also works to keep the cost of annual travel insurance low.

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Insurance has been around in some form for many centuries. There is documented evidence that Chinese and Babylonian traders protected themselves from risk as far back as the third century B.C.

The reason we have insurance is because we like to offset the potential for big financial losses. We buy homeowner’s insurance to cover our home and the stuff inside it in case it’s destroyed by a fire, for example, and we need to recover our loss. You won’t have the same items you had before, but you’ll be able to replace what you lost to a certain extent.

Here’s how travel insurance works.

Travel Insurance covers Travel Losses

Travel insurance is a specific type of insurance designed to cover the losses a traveler may experience. Some of the potential losses for a traveler include pre-paid travel costs like airline tickets, hotel reservations, and cruise payments. Other losses may include the unexpected expense of emergency medical treatment, an evacuation off a mountaintop, or the cost required to recover a dead traveler’s body.

See What does travel insurance cover? for more details.

The Principles of Insurance are the Same

Travel insurance works on many of the same principles of other insurance plans: the traveler pays a small amount to cover their risk, and the insurance company takes that money and holds it or invests it. Lots of travelers paying in means the travel insurance company can pay out when a particular traveler experiences a loss.

How Travel Insurance Premiums are Determined

Travel insurance premiums (the amount a traveler pays) are determined by risk factors. The typical risk factors that influence travel insurance premiums are:

• the age of the traveler,
• how much the traveler is spending (and would therefore stand to lose),
• and the traveler’s destination

Travel insurance premiums for an older traveler spending a lot of money on a open-water diving trip, for example, would be higher than the travel insurance premium for a young student going abroad to study at university. The greater the risk, the higher the premium.

See How much does travel insurance cost? for more details.

The Plan Outlines the Coverage

When an insured traveler encounters a travel disaster and files a claim with their travel insurance company, the company reviews what happened and applies the coverage rules to determine how much the traveler should receive to compensate their loss. The rules of the travel insurance policy vary from plan to plan and this is where travel insurance is a little different than other types of insurance.

Many travelers make the mistake of assuming that their travel insurance plan will cover anything that happens on their trip, but that’s not true – it’s not even how insurance works. If the loss that occurred isn’t listed in the policy, then the claim will not be covered.

Here’s an example: If your travel insurance plan covers trip cancellation losses except in the instance of terrorist acts and you cancel your trip because of worries over terrorist attacks, you won’t receive reimbursement for that loss.

See What Travel Insurance Does Not Cover for more information.

To Summarize …

Travel insurance plans specifically outline what is and is not covered, so it’s important to review your plan carefully to understand your coverage. Understanding the exclusions of your policy is just as important as understanding the coverage.

See our Travel Insurance 101 for 8 steps to understanding travel insurance. Also, see our steps to 100% confidence in your travel insurance plan for hints on how to review your plan and ensure that you have the right coverage.

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When your travel insurance is third-party insurance and separate from the airline, you might wonder why the insurance company asks for confirmation of airline reimbursement for a lost bag.

Here’s why: when the airlines lose your bag, the loss of the bag is their responsibility and the company should pay some restitution for your loss.

Some travelers assume that their travel insurance plan will pay a benefit for lost baggage separate from the airline’s restitution, but that would amount to ‘double-dipping’ and that’s not how insurance works.

Once the matter is settled with the airline, your travel insurance company will take over and examine what you lost, what you received from the airline (in the form of a check or vouchers) and then subtract that amount from their payout, sending you the remainder. The amount you receive still may not equal what you lost, but it’s usually more than you get from the airline alone.

If you’re wondering if having lost baggage coverage with your travel insurance plan is worth it given this information, consider the following facts:

1. Reimbursement from the airlines is extremely limited
2. The airline will depreciate the value of the items you lost
3. They have long lists of items they won’t cover – even if the loss was their fault
4. Items over a certain limit must be accompanied by the original receipt with your claim

The lost baggage coverage you get with a travel insurance plan is intended to reimburse you at replacement value (not depreciated value), including the bag you lost.

The post Why does travel insurance need the airline reimbursement for my lost bag? appeared first on CoverTrip.

Travel insurance encompasses a range of coverage including cancellation, baggage loss, medical emergencies, evacuations and more. When readers ask: Do I need travel insurance for the Virgin Islands, they’re wondering whether their emergency medical care will be covered in the islands or not.

If you’re from the U.S. or Great Britain, your coverage may extend into the Virgin Islands owned by your country of origin. If you’re from another country, having a travel medical insurance plan is ideal.

Note: If you’re concerned about pre-trip cancellations, see our review on trip cancellation coverage for the information you need.

Which Virgin Island(s) Will You Visit?

The history of the Virgin Islands is long and varied. Various islands having been owned by the Dutch, Spanish, British, and Americans over time, they are now consolidated under two countries – the U.S. and Great Britain.

The U.S. Virgin Islands now consist of:

• St. Croix
• St. John
• St. Thomas
• Water Island

The citizens of the U.S. Virgin Islands are U.S. citizens but they are unable to vote in presidential elections.

The British Virgin Islands now consist of:

• Tortola
• Virgin Gorda
• Anegada
• Jost Van Dyke

The citizens of the British Virgin Islands are classified as citizens of British Overseas Territories and hold full British Citizenship.

In addition to the above-listed islands, there are about 50 smaller islands that are incorporated into the U.S. and British territories. For visitors to these islands, it’s important to think carefully about your travel plans to determine whether your health insurance will cover you where you’re going.

Do you need travel medical coverage?

For U.S. visitors, it’s important to understand that Medicare and Medicaid programs do not pay for medical services outside the U.S. Many of the larger Virgin Islands are under the governance of U.S. and Great Britain but others are unincorporated territories. If your health insurance extends to the U.S. Virgin Islands and you’ll be staying on those islands, you may not need travel medical insurance.

If you’re the type of traveler who likes to hop islands, having a travel insurance plan to cover overseas emergency medical costs is ideal because you’ll be covered either by your own health insurance plan or with your travel medical insurance coverage. Remember, if your primary health coverage from back home is not in effect where you’re traveling, your travel medical insurance automatically becomes your primary coverage plan.

Even if your health coverage is in effect for your trip, having a travel insurance plan with medical evacuation coverage is a good idea. If you’re badly injured – say, in a SCUBA accident – the facilities on the islands may not be adequate to treat your injuries and you’ll want to be taken to the mainland for treatment. Medical evacuations can cost upwards of tens of thousands of dollars without travel insurance.

Useful Virgin Island Information

If you don’t need travel insurance for the U.S. islands, be sure to check out the Health Information from the CDC for travelers to the U.S. Virgin Islands. You can also read helpful information covering all kinds of questions about the Virgin Islands, including entry and exit requirements so you’re sure to bring the right travel documents.

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Travelers often ask us, “What type of travel insurance should I get for my trip?” and our answer is to ask them a little about their trip, themselves, and who’s going along. After all, it’s important to understand the details about the travelers and their planned trip before we can make a recommendation.

Some travelers need a full featured plan with lots of coverage for cancellation, baggage, etc.; others only need a travel medical plan, and still others need a med-evac plan because everything else is already covered by other insurance. The key is to get the travel insurance coverage you need but avoid paying for a lot of extras or paying for duplicate coverage.

The following is a brief explanation that should help you decide:

1. You need a travel medical plan when your travel is domestic, relatively cheap, and your destination is outside your health insurance network. Cheaper travel plans don’t have the same requirements for trip cancellation coverage … after all, there’s little invested!
2. You need a package plan when your travel is expensive, it’s a once-in-a-lifetime trip, or you’re on a tight budget and can’t afford to lose your trip investment. Package plans cover a wide range of travel risks, including trip cancellations.
3. You need a specialty plan when you have an insurance gap that needs to be covered. If your medical care abroad is paid for, you may only need a travel accident plan, for example.

See our Tips to Buy the Right Type of Travel Insurance for more details.

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Travel accident insurance is a specialized type of travel insurance plan. Essentially, it acts as life insurance and insurance against accidental death and dismemberment in the case of a travel accident. The benefits are paid regardless of whether the traveler has other life insurance and AD&D coverage.

Specifically, travel accident insurance plans limit their coverage to the following:

• Accidental Death and Dismemberment (AD&D)
• Emergency Evacuations
• Repatriation
• 24/7 Travel Assistance Services

Some travel accident insurance plans include a little coverage for emergency medical expenses.

A few travel accident insurance plans give the traveler a maximum benefits range to choose from and several are designed specifically for the frequent business traveler and include coverage for non-medical emergency evacuations.

What is a covered travel accident?

A covered travel accident is an accident that occurs to the traveler that the travel insurance plan will provide financial reimbursement for.

This type of coverage pays in case of death, losing hearing, eyesight, or a limb, while on a plane, ship, or bus licensed to carry passengers and available to the public.

If needed, travel accident coverage can protect you from extreme financial hardship and ensure your family and loved ones are provided for if something happens to you while traveling. It’s important to note that a covered travel accident is one that is not excluded by the travel insurance plan.

What type of traveler buys travel accident insurance?

Travel accident insurance is specialized insurance to cover a specific need, i.e., the loss of life, physical abilities, or limbs. It’s ideal term life and AD&D coverage for business firms who want to offset the loss of a key employee, for example.

Other travelers who buy travel accident insurance include:

• War correspondents
• Journalists
• Government employees
• Frequent business travelers
• Missionary and aid workers

Should the insured traveler die on their trip or be seriously injured, their beneficiaries or the traveler would receive the benefit of this plan.

Travel Accident Insurance Exclusions

Some travel accident insurance plans limit the death benefits to flight accidents only, and some travel accident plans place limits on where the traveler can travel, i.e., specific countries and territories. Nearly all plans require the traveler to be at least 100 miles from home before the coverage is in effect.

Related topics

• Your credit card doesn’t deliver the travel protection you think it does
• What does travel insurance cover?
• Is travel insurance necessary?

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Travel insurance plans often list some coverage as ‘secondary’ and we’ve had many readers ask us what that means. Any coverage that is identified as secondary simply means it will pay after the traveler’s other insurance coverage has paid what it will pay. Specifically, it pays second – after the primary coverage.

Secondary Typically Applies to Medical and Baggage

Typically, the terms primary and secondary are applied to travel medical coverage and baggage coverage. When you’re making a travel medical claim, it means you should make a claim on your primary health insurance coverage first and then settle the remainder of the medical claim with your travel insurance provider.

If you’re making a claim on your baggage coverage because the airline lost your bag, you’ll work things out with the airline first and then make a claim for the remainder on your travel insurance plan. Whatever is paid out by the airline will be deducted from the amount that your travel insurance provider will pay.

If You Have No Primary Coverage, Secondary Becomes Primary

If your primary coverage is not in effect where you are traveling – and many domestic health insurance plans do not cover the medical costs for their members who need medical care outside the U.S. – then your secondary coverage with your travel insurance becomes primary by default. You don’t have to do anything except make a claim directly with your travel insurance provider.

Primary Coverage Isn’t Better than Secondary

Many travelers make this assumption, but primary coverage isn’t necessarily better than secondary coverage – it just refers to who pays first. You can choose and buy travel plans that include primary travel medical coverage, but it’s not necessary unless you have a reason for purchasing that type of travel medical plan.

See more about the differences between primary and secondary travel medical coverage.

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We’ve recently had some questions from readers who want to know whether travel insurance cover giving birth under the medical coverage portion of their policy.

A pregnant traveler who is in an advanced stage of pregnancy is not likely to have travel insurance coverage for a normal birth because the birth is an expected event. Travel insurance only covers unexpected events, and so childbirth is not covered unless it’s an unusual medical situation.

To be specific, pregnancy is excluded from all travel insurance coverage with exclusionary language like the following:

“pregnancy, childbirth, or elective abortion, other than complications of pregnancy;”

It’s important to understand that travel insurance coverage for pregnancy depends on the circumstances. First, the pregnancy must occur after the travel insurance policy’s effective date, or it’s considered a pre-existing medical condition.

Next, premature labor is considered a complication of pregnancy, which is typically covered under a travel insurance plan’s medical coverage and therefore medical treatment is covered up to the plan limits. Here are the best rules to apply to getting travel insurance to cover giving birth:

1. If the traveler discovers she is pregnant after making travel arrangements and has already purchased travel insurance, she’ll need to carefully review the plan’s rules for pregnancy and the coverage for medical conditions.
2. The traveler is already pregnant and wants to purchase travel insurance to cover any medical complications, she should be sure that the plan includes coverage for pre-existing medical conditions (an upgrade may be necessary and there are timing restrictions involved).
3. If the traveler becomes pregnant after the policy’s effective date, she should verify that there is enough medical coverage in case something does happen on the trip and she needs medical care.

To summarize, you can get travel insurance coverage for emergency medical care due to complications of your pregnancy, but a normal pregnancy that’s proceeding smoothly along is not covered – including giving birth.

Related: See Tips for a Safe Trip when She’s Pregnant

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Travel insurance has some benefits that are similar to health insurance, but it is not the same thing. Health insurance defrays the cost of regular medical care, emergency medical treatment, medicine and other medical-related costs inside your health insurance network. Every health insurance plan is different and if you get your health insurance through your employer, that employer has negotiated the terms, including how far the network of coverage applies.

Health insurance is continual coverage as long as the plan premiums are paid, and it can be extended under COBRA rules for some time after you are no longer working for the company.

There are two types of plans that include health insurance-like coverage:

1. Vacation plans with coverage for emergency medical care, and
2. Travel medical plans that deliver health insurance benefits over a period of time.

We’ll explain more about how each of these works in the following sections.

Health Insurance Coverage with a Travel Insurance Vacation Plan

A vacation plan (also called a package plan) with emergency medical coverage provides payment for the treatment of medical emergencies, unexpected illnesses (not due to pre-existing medical conditions), and even emergency medical transportation.

• If you’re traveling domestically, your travel insurance plan will be secondary to your health insurance coverage, which means you’ll make a claim on your health insurance plan first and the remainder will be paid by your travel insurance plan (up to the plan limits). This is a great way for travelers to cover big medical bills when they’re outside their health insurance network, but you must verify that the plan includes medical coverage inside your home country.
• If you’re traveling abroad, your travel insurance plan will typically be your primary plan because most U.S.-based health insurance plans stop at the border. This means you’ll make your claim for reimbursement or payment directly with your travel insurance provider. This is the best way for travelers going outside their health insurance network to have coverage where they would otherwise be at the mercy of the local government or their credit card limits.

Health Insurance Coverage with a Travel Medical Plan

A travel medical plan can include coverage for emergency medical treatment, but there are also long-term plans that cover a traveler for routine medical care, prescription drugs, and more. You can get travel medical plans to cover individual trips, multi-trip travel plans, and long-term travel. A travel medical plan is ideal for frequent business travelers, expats, those living abroad for work, students, etc.

The long-term travel medical insurance plans are ideal for when a traveler is working abroad or traveling continually and wants to protect their health and have coverage for medical emergencies. Some of these plans offer coverage for dependents, include dental care as well as routine medical check-ups, vaccinations, etc. similar to health insurance. Most require that you have the coverage for at least a year before some of the long-term benefits like coverage for pregnancy, dental, etc. are allowed. In short, there’s a long waiting period to get access to some benefits.

Some travel medical plans include coverage within your home country – for short visits – but most coverage ends as soon as you re-enter your home country so you’ll need to have a health insurance plan when you return home.

Summary

While many travel insurance plans deliver health insurance-like coverage for the duration of the travel plan, it’s not 100% health insurance unless you take out long-term travel medical coverage.

The post Is Travel Insurance the same as Health Insurance? appeared first on CoverTrip.

The trip deposit date is any date on which you paid for any portion of an upcoming trip.

Perhaps you sent a deposit in on a vacation rental or snagged a good deal on airfare, for example. When you make the first trip deposit date is important because it essentially starts the clock on how soon you should purchase your travel insurance if you want certain coverage.

Many travel insurance plans require you to purchase your coverage within a certain number of days (usually between 10 and 14 days) of making your initial trip deposit. In fact, this is one of the reasons we recommend buying your travel insurance as soon as possible to avoid one of the most common travel insurance ‘loopholes’.

Coverage that requires purchase soon after trip deposit:

• ‘Cancel for any reason’ coverage
• ‘Cancel for work reasons’ coverage
• Pre-existing medical condition coverage
• Financial default coverage
• Hurricane coverage
• Work conflict coverage

You can purchase your travel insurance up to the last minute, but you may not have coverage for certain events if you wait that long. Buying the travel insurance plan too late is one of the most common reasons for claim denials, so pay attention to that first trip deposit date.

See when should I buy my travel insurance for additional details.

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