This is largely dependent on the length of your trip or trips. If you're looking for car hire for a couple of days, or even for two weeks, you would be better off with a single trip or daily policy as this will allow you to insure your car from around £1.80 a day in Europe.
However, if you are looking to hire a car for more than 17 days, it generally works out to be better value to buy an annual policy instead of a single trip policy. This is because, by the time you add up 17 times £2, it comes to more than the cost of an annual policy. The same applies if you are looking to hire a car for more than 17 days over multiple trips within a 12 month period, as it will cover you for all of these trips.
It gets more complicated if you are renting in two different regions. Most car hire policies either cover Europe or Worldwide, with some offering additional cover in the Americas. So if you do a longish hire in Europe and a shortish one in the USA and require a higher level of cover for the USA trip then it may work out cheapest to buy single trip policies. Simply run individual quotes using the MoneyMaxim car hire insurance comparison service and you'll quickly be able to work out whether an annual or individual policies work best for you.
Another advantage of annual policies over multiple single trip policies is that it reduces your administration time - you only need to go through the purchase process once!
Remember to read the terms and conditions of your insurance, as this may be able to answer any further questions you have and to find out the limitations of your policy. Also consider claim limits when comparing your options too.
If you do have any queries regarding this, please contact our car hire insurance team through our online chat service or telephone within our office hours and we'll do our best to help.