The smell of coffee gets you first, drifting up the stairs over the orchid and hibiscus to your bed. The morning sun glittering off the Pacific blinds you, but the aroma of fruit toast tugs you down that same set of stairs, and the sound of papayas in the juicer sets your course in the right direction. The crystal-blue ocean draws you to the edge to take in the view of waves crashing.

And it's then, when you see tourists in conversation with a gathering of local police, that you think to yourself, "That's why I've got travel insurance".

But hey, that's not the only reason. So hold on to that coffee and fruit toast moment (or substitute preferred tropical breakfast regime here) while we elaborate on the other reasons why you have – or need – travel insurance.

• You're not a burden on your family and friends. The cost of a hospital stay or even getting to a hospital could be several years' salary, and you may not be going home until your parents have re-mortgaged their house or your friends have sold their car.
• Some countries won't let you in unless you have travel insurance (e.g. Cuba)
• You don't have to worry as much about what could go wrong on your holidays
• The Australian government won't pay your medical bills for you
• You like to travel wherever you want, whenever you want without worrying about planning and researching the trip
• All of the above
• Any other reason not listed above

And finally, the number one reason why you have travel insurance:

• Because you're travelling overseas

In the end, it's really that simple. If you're going overseas, it's just as important to get travel insurance as it is to bring your passport.

Case study: Claire*

Claire fell down some stairs while visiting historic sites in Madrid, Spain, crushing her skull. She underwent emergency surgery and was unconscious for four days. Thankfully, Claire's travel buddies quickly notified her insurance company.

The insurer was able to help Claire and her family right away. They paid for her mother to fly to Spain for support as she recovered, and met all of the costs associated with her medical treatment, her recovery in Spain and her medical evacuation to Australia.

Claire's insurance saved her and her family more than $140,000.