The most extreme form of this in-house insurance is seen when rental car companies try and sell you their insurance coverage's at rates typically ten times or more higher than you would pay through a commercial insurance company.

Annual or Single Trip Policies

Most travel insurance is offered as a single trip policy that covers you for your one particular upcoming trip. However it is possible to buy annual travel insurance that provides cover to you – potentially for as much travel as you might do during the entire year.

This is another form of ‘buying in bulk’ and the value tends to be very much greater in an annual policy than in a single trip policy, although the biggest factor here is how much travel you’re likely to do in a year. If you’re only going to travel once or twice, single policies are better, but if you have a lot of travel lined up in the next twelve months, check out an annual policy as a possible alternative.

Primary or Secondary Cover

This is an important point of distinction. Primary cover means that the company offering it will ‘pay first’; secondary cover means that they will pay second (or last), only after you’ve claimed as much money as possible from any other insurance you already have.

The important difference is most clearly illustrated with car insurance. If you have a $5000 claim, you don’t want to have to use your regular, at-home, auto insurance because they might then increase their rates and you lose your ‘good driver’ history with them. If the travel insurance policy has primary cover auto insurance, then you don’t need to do anything to mess up your regular auto insurance at all; but if it is secondary cover, the travel policy won’t do anything until after you’ve gone to your regular insurer and got as much as you can from them.

Needless to say, primary cover is better than secondary cover!