Learn about the different types of travel insurance and what they cover.

Montezuma's revenge? Broke your arm bicycling through the Swiss Alps? Wear your travel misfortunes like badges of honor -- your friends will call you a hero just for coming home alive.

As to the financial details of your troubles while on the road, that's the job of travel insurance. If you need to cancel or interrupt your trip, or if you become ill during your journey, travel insurance will reimburse you for the expenses you incur due to your bad luck.

Many travelers, however, purchase insurance that they do not need. Many standard homeowner's or health insurance policies, for instance, cover lost luggage or accidents abroad.

Trip cancellation and trip interruption insurance are generally the most useful types of travel insurance because they cover losses that are usually not covered by most travelers' existing coverage. These two types of insurance are often bundled and sold as a package.

Trip cancellation insurance generally kicks in if the cancellation is due to an unforeseen accident, illness or other specified event that affects you, a close family member or your traveling companion. Obviously, many terms are open to interpretation: "unforeseen," "other specified event" and "close family member" are not always self-explanatory.

For instance, if your chronic back problem flared up and forced you to cancel your trip, your policy might not reimburse you because your illness was foreseeable. Many policies, in fact, specifically exclude pre-existing conditions. Injuries sustained during high-risk activities such as sky-diving are also usually excluded. And, strangely enough, almost every insurer excludes pregnancy from coverage. Be sure you know the reasons for cancellation that will be accepted.