Have you ever wondered about the difference between a Single Trip policy and an Annual Multi Trip policy?
Perhaps you’ve been thinking about taking a couple of trips and thought it might be cheaper to take an Annual Multi Trip policy.
So how do you know if an Annual Multi Trip policy is right for you?
To help you decide, let’s look at the main differences between a Single Trip policy and an Annual Multi Trip policy.
As the name suggests, a Single Trip policy covers one trip.
If you are taking a return trip, the Single Trip policy will cover you from the date you leave home to commence the trip and end when you return home again. It is a continuous period of cover. Provided you nominate the policy start date as your departure date and the policy end date as your return date, you will be covered for the full travel period.
Usually, a Single Trip policy can be taken to cover a trip as short as 2 days or up to 365 days. Your policy period is determined by the number of days you will be away from home. Sometimes, a travel insurer will be able to cover you if you will be travelling for longer than 365 days but this is subject to their underwriting guidelines.
An Annual Multi Trip policy provides cover for frequent short term trips during an annual period. When you purchase the policy, you select the annual period you want. You are then covered for any number of trips taken within that annual period – provided each trip is less than the maximum trip duration you selected.
With an Annual Multi Trip policy, the insurer will offer you a number of maximum trip duration options. These are normally 31 days, 50 days, 60 days and/or 90 days. If you select a maximum trip duration of 31 days, you can take as many trips as you like in the annual period of cover but each trip must not exceed 31 days. If you select a maximum trip duration of 50 days, each trip you take in the annual period of cover must not exceed 50 days.
When arranging an Annual Multi Trip policy, you should nominate the policy start date to be the date you will be starting the first trip you want to be insured. This may be many months in advance and in which case you would effectively get a period of insurance that is longer than 12 months. That is, you would be covered for pre-departure cancellation up until the departure date of the first trip and then for a further 12 months thereafter.
So what are some of the benefits of an Annual Multi Trip policy?
Quite obviously, a major benefit of the Annual Multi Trip policy is that you have cover for a whole year and do not need to arrange travel insurance each time you book a trip.
Some Annual Multi Trip policies offer free inclusions like automatic cover for a set number of days of snowsport activities.
Annual Multi Trip policies that cover international travel often also include cover for travel within Australia provided these domestic trips meet certain criteria – eg the trip must be a certain distance from your home and involve an overnight stay.
Some insurers offer the option to choose a couple or family Annual Multi Trip policy and this may enable each member of the family to travel independently of the other.
What about the pitfalls?
Perhaps the main issue is the maximum trip duration limitation. It may be that you have an insufficient maximum trip duration to cover one or more of your trips. For instance, if you have a 31 day maximum trip duration on your policy but one of your trips will be 40 days, your cover will be insufficient. Take care here to read the policy to make sure you understand how this affects you. Some insurers would cover you for the first 31 days of the trip and you would then need to make alternative arrangements for the balance of the trip period. Other insurers wont cover you at all because the trip period exceeds the 31 day maximum trip duration noted on your policy.
Some insurers will allow you to “add” extra days for a trip which exceeds the maximum trip duration of your policy, others will not. This is something you would need to check with your chosen provider.
Another issue to take into account is that the terms of some Annual Multi Trip policies require that for cover to be in force, each trip needs to be booked within the policy period. This could be an issue if you purchase a trip before arranging an Annual Multi Trip policy or if you are renewing an annual policy and the booking was made while insured by one policy/insurer but the trip will take place while insured by a new policy/insurer. In this case, the trip would “straddle” two policy periods (one during which the booking was made and the other during which the trip will occur).
A similar issue arises if your annual period of cover will end while you are travelling. Is the trip insured under the expiring policy or the new policy (provided you have renewed / purchased a new policy)?
These should be simple queries to resolve by contacting your chosen provider. Please make sure your cover is continuous and that you understand the applicable terms and conditions.
What about the cost?
An Annual Multi Trip policy is best suited to anyone who travels frequently during the year. For frequent travellers, this policy type is not only more convenient, it is also more economical.
If you plan to travel once (or maybe twice) within a year, one or two Single Trip policies may be a more economical choice. If you plan to travel internationally at least twice in the year, it’s worth doing a cost-benefit analysis to determine whether it would be cheaper to go with an Annual Multi Trip policy or a few Single Trip policies. Given that travel insurance depends to a certain extent on the number of days you will be travelling and where you will be going, two of the key considerations here would be the destinations and durations of trips you’re planning to take. Your chosen travel insurer should be able to prepare a few quotes to help you get an idea of what might be your best bet.