The primary benefit of travel insurance is the knowledge that should something go wrong while you are abroad, you won't be responsible for finding the money to put it right, at a time when you are already stressed out.
Travel insurance policies come in various forms but most policies for UK residents include the following categories of cover, although you should always read the policy wording to find out what is and is not covered by the particular policy, also different policies may have the benefits in separate categories or bundle them under one heading:
Emergency Medical Treatment
Covers the cost of emergency medical treatment, this usually involves being treated at a hospital but not necessarily. Prior authorization by the insurer is normally required if the expected cost of treatment is likely to be above a fixed amount set out in the policy wording, this is often quite low, in the hundreds of pounds.
Emergency Medical Assistance
Covers the cost of emergency medical assistance, mainly getting someone to hospital, whether that is the costs of a road ambulance or where necessary an air ambulance or sea rescue, although you must check that you are covered for the activity in which you were participating when injured or becoming ill. Repatriation
Covers the cost of returning you to your home country after receiving medical treatment, with an accompanying medical professional where necessary. Also covers the return of your remains in the event of your death abroad.
In the event of there being no hospital capable of treating you locally, this section of the policy covers the costs of transporting you to the nearest hospital that can treat you, even if it is in another country
A small daily amount to cover incidental costs of being a hospital in-patient abroad. Usually has a minimum length of stay requirement and a maximum limit on the total benefit paid.
Cancellation, Curtailment & Trip Interruption
Covers any financial loss, unrecoverable by other means, such as lost deposits or non-refundable transport costs, you suffer as a result of having to cancel or cut short your trip or having to return home suddenly. Common reasons for claiming under this section would be the sudden and unexpected serious illness or death of a close relative, or something happening to your home such as fire or flood. What is considered a valid reason to claim under this section varies from policy to policy so as usual you must read the small print.
Covers additional costs if you miss your scheduled means of transport for departing your home country and the first international means of transport on the return journey. Cover under this section is usually restricted to incidents out of your control such as failure of public transport or your own vehicle breaking down, although you may be required to prove that it had been maintained regularly. Missed connections in a third country that is not your home country or the final destination country are often excluded.
Provides cover in the event that you injure a third party or damage their property, although there is often an exclusion for liability arising from the use of a vehicle or by an animal under your control, such as a horse or dog.