The fact of the matter is that we normally buy travel insurance because we are afraid. Afraid that we will get sick in a foreign country and not be able to pay the medical expenses, afraid that something will happen at home and we have to cancel our trip and lose all deposits, et cetera.

It is therefore somewhat disconcerting to know that the one thing a travel insurance policy will NOT pay out for is for expenses you incur because you are scared. If you go to a foreign country where there are many wild animals and once you arrive there you find yourself too scared to leave the hotel, your insurance company is not going to compensate you for cancelling your holiday.

Similarly, if you go to another country and a volcano erupts near the city where you are staying, without really endangering you, don’t even bother to contact the insurer and try to claim because you want to cancel your trip.

This is, unless you have a policy that specifically contains a ‘cancel for any reason’ clause. These policies are normally substantially more expensive than an ordinary policy, but will cover the cost of up to 75% of cancellation costs you may incur, regardless of the reason.

If you plan to travel to a place where there is a real possibility of terrorism, political violence, earthquakes, volcanic eruptions or other natural disasters, you need to check the fine print of your travel insurance policy to make sure these events are in fact covered. Not all companies do cover them and you might need a special clause in your policy to specifically cover a certain event.

Even if something like terrorism is in fact covered, you must be aware of the fact that there are sometimes exclusions and limitations.