AS Jane Ryan's* flight from Townsville to Brisbane prepares to taxi down the runway, she breathes a sigh of relief that the 30-minute delay caused by bad weather is unlikely to affect her onward flights to Los Angeles and Seattle, as she's left sufficient time between departures.

But an unrelated mechanical fault forces the plane to return to the gate, where it's held for a further two hours while technicians fix the problem. By the time the aircraft lands in Brisbane, Ryan has missed her connection but is allocated a seat on a later flight at no extra cost as the booking is with the same airline.

When she lands in LA, however, her flight to Seattle has left and she is forced to cover the cost of a replacement ticket to complete her journey.

Because the LA to Seattle leg is with a different airline, that carrier will not bear the cost of a new ticket. Ryan's travel insurance company won't accept liability because the two-hour delay that caused the knock-on problems was due to a mechanical fault, not a "covered" event such as severe weather or an airline strike.

In Canada, Simon Walker* is suffering a nasty case of sunburn. The Sydneysider struggles to carry his three heavy bags - slinging one over his shoulder simply aggravates the pain. After travelling by train from Vancouver to San Diego, Walker disembarks, carrying two of his bags from the carriage to the platform and then returns to grab the third ... but the train is pulling out of the station, his bag inside. After trying to retrieve the bag via railway lost property, the 28-year-old assumes his insurance company will cover the cost of the unrecovered items, including his iPod, phone and medicines, but the claim is refused on the grounds the bag was "unattended" under the terms of his policy.

Ryan and Walker are among myriad travellers who've had their holidays blighted by their misunderstanding of what is protected by their travel insurance.

Travel insurance comparison website Compare Travel Insurance says unsuspecting policyholders are frequently caught out by wrongly assuming all scenarios will be covered in claims for missed flights, lost luggage or injury.

A tangled web of inclusions and exclusions can mean the holiday peace of mind customers have forked out for amounts to nothing if they haven't read the fine print.

"The majority of complaints (we see) are for situations that are not covered, where customers didn't understand their policy," says Compare Travel Insurance director Natalie Ball.

"The most common misunderstanding (regards) cancellations and the misconception that all cancelled or missed travel situations are covered."

Flights cause greatest confusion. While most insurers will cover flights missed or cancelled due to accidents en route to the airport, severe weather, airline strikes, natural disasters or hijacking, there are many situations in which travellers are not protected.

If a flight is cancelled due to a mechanical fault, overbooking, maintenance, repairs, rescheduling, service faults or the airline closing down, for example, insurers regard it as the airline's responsibility, not theirs, to reimburse or find an alternative flight for affected customers. Missed accommodation as a result of non-covered flights similarly will not be compensated for by insurers.

Travellers' own negligence, such as arriving late for check-in or failing to promptly cancel pre-booked travel if deemed by a doctor unfit to travel, also falls outside the terms of an insurance policy.

Lost and stolen property, and associated replacement values, can be another minefield, says Ball, particularly when it comes to "unattended" or "unsupervised" items, which can be defined as anything from belongings accidentally left in a cab or on an airport conveyor belt to, in extreme circumstances, a handbag sitting at a diner's feet, but out of sight, in a restaurant.

If you leave your bag in a luggage room in a hotel after you've checked out, you won't be covered, nor if you accidentally leave your passport in an airline seat pocket and get off the plane.

Even with items that are insured, replacement values can be a source of anxiety for claimants.

"Insurers will only pay an amount that they believe your items to be worth at that time, rather than at the time of purchase," Ball says.

And don't expect to get anything at all if your belongings were lost or stolen while you were drunk.

"The best thing for travellers to do to understand their policy is read the insurer's product disclosure statement so they fully understand the inclusions and exclusions," Ball says.

The main issue that gets travellers into hot water when it comes to claims for medical mishaps is failure to disclose pre-existing injuries or illnesses.

"Travellers do not always realise they have to let insurers know of all their pre-existing medical conditions," Ball says.

"Somebody may have broken their leg two years ago and not considered it to be a pre-existing condition for which they need to inform the insurer. But if they break their leg again on holiday, or get a swelling in that leg due to the previous injury and didn't make the insurer aware of the previous broken leg, they would not be covered."

With proper disclosure, however, travel insurance can mean the difference between prompt and inexpensive treatment and financial ruin, particularly for those who require medical treatment or hospitalisation in places such as the US, where fees can be incredibly high.

"Having the right travel insurance can really change how your trip turns out. Personal belongings, cancellation cover and depreciation aside, travel insurance more importantly covers medical expenses and emergencies for injury or illness which can run into thousands of dollars when travelling overseas," Ball says.

"We encourage travellers to shop around and learn the details of their policy.

"Check limits and any excess that applies; the cheapest isn't always the best option.

"Regardless of how often you travel, you never know what's around the corner."

* Names changed

Travel cover - the fine print

●Flight cancellations, depreciation, loss or theft of luggage and personal items and medical cover are the most common areas of confusion when it comes to claims. Travel insurance policies are legal documents. Read the Product Disclosure Statement which explains in detail the policy benefits, including inclusions and exclusions.

●Jewellery, mobile phones, cameras and computers in the cargo hold of any aircraft, ship, train, tram, taxi or bus will not be covered by insurers.

●Luggage and personal effects left unattended in a motor vehicle are not covered unless secured in the boot or a locked storage compartment.

●To make a claim, you must be able to prove to your insurer you have done everything reasonable to avoid loss without delay, and may need written proof.

●In all covered circumstances, travel insurance will only provide reimbursement for the non-refundable cost of the trip you've already paid for.

comparetravelinsurance.com.au