Travel insurance is one of the few products people buy hoping never to use, which means the terms go unread by nearly everybody. That's a mistake, because the variation between policies is enormous and the exclusions are where the product actually lives.
The medical cover is the point
Start with the thing that matters. The cancellation and baggage elements are nice to have. The reason to buy travel insurance is medical treatment abroad and, specifically, repatriation.
An air ambulance from a distant country can cost an extraordinary amount — figures in the tens or hundreds of thousands are routinely quoted. Emergency hospital treatment in some healthcare systems can be similarly severe.
So the first thing to check is the medical limit and whether repatriation is included and uncapped or subject to a sub-limit. A policy with a low medical ceiling is close to decorative for the scenario that would actually ruin you.
Pre-existing conditions
The single largest source of declined claims, and the one people most often get wrong.
Most policies exclude anything related to a pre-existing medical condition unless it's been declared and accepted, usually for an additional premium.
The definitions are broader than people assume. It typically covers anything you've received treatment, medication or advice for within a defined period — often two or five years — regardless of whether you consider it an ongoing condition. Controlled blood pressure counts. A resolved episode counts. Something you mentioned to a doctor and were told not to worry about counts.
Failing to declare doesn't just void the claim relating to that condition. Depending on the policy and jurisdiction, it can void the entire policy, including cover for something entirely unrelated.
Declare everything. The extra premium is almost always small relative to the risk of a rejected claim.
Alcohol
An exclusion that catches an enormous number of people and is rarely read.
Most policies exclude claims arising from being under the influence of alcohol. The wording varies — some say intoxicated, some say excessive consumption, some are vaguer — but the practical effect is that an injury sustained after drinking may not be covered.
Given that a substantial proportion of holiday accidents involve alcohol to some degree, this is not a marginal exclusion. Insurers do investigate, and hospital records frequently note it.
Activities
Standard policies exclude a long list of activities, and the list is longer than most people expect.
Obviously excluded: most winter sports without a specific add-on, scuba diving beyond shallow depths, motorcycling, climbing.
Less obviously: riding a moped or scooter, extremely common on holiday, is frequently excluded or requires you to hold an appropriate licence in your home country and wear a helmet. Many claims fail on the licence point specifically.
Also commonly excluded: jet skis, quad bikes, cycling on roads in some policies, hiking above certain altitudes, and anything described as an organised competitive event.
Check the list against what you actually intend to do, not what you think of as risky.
Cancellation, and what counts
Cancellation cover pays if you can't travel for a specified reason. The specified reasons are narrower than "something came up".
Typically covered: your own illness or injury, the death or serious illness of a close relative, jury service, being made redundant in defined circumstances, and significant damage to your home.
Typically not covered: changing your mind, a work commitment, a relationship ending, an ordinary illness that doesn't prevent travel, or a foreign office advisory against travel to your destination unless the policy specifically includes it.
That last one surprises people. Cover for disruption caused by advisories, strikes, natural events or airline failure is frequently an optional extra rather than standard.
Airline failure and supplier insolvency
Worth its own note. If an airline or tour operator ceases trading, whether you're covered depends on how you booked and on the specific policy.
Package holidays booked with a licensed operator usually carry statutory protection in many jurisdictions, which is separate from insurance and generally stronger. Flights booked directly frequently don't.
Paying by credit card can also provide protection depending on the jurisdiction and the amount. It's worth knowing which of these applies to your booking, because the insurance may be the weakest of the three routes.
Practical checklist
Before buying: check the medical limit and repatriation terms; declare every condition; check the activity list against your plans; check the excess, which can be per person per section and add up; and check whether the policy covers the full duration, since single-trip policies have maximum trip lengths.
Before travelling: put the emergency assistance number in your phone, and take a photo of the policy documents. In an actual emergency, most policies require you to contact the assistance line before incurring significant costs, and failing to do so can reduce or void the claim.
That last point is the one that most often turns a valid claim into a rejected one, and it takes thirty seconds to prepare for.