Delayed departure

This covers you for expenses – such as food and accommodation – that you may incur because your plane, boat, train or whatever is late leaving. Most policies will pay out a small allowance, and only after you have been delayed for 12 hours, followed by an even lower amount for subsequent 12-hour periods of delay. Some policies will pay back your holiday cost if you decide to cancel after having been delayed for more than 12 hours.

Missed departure

This pays your extra expenses if you miss your plane, boat, train or whatever and have to make other arrangements to get to your holiday destination which cost you extra. If you have a fully flexible ticket, you do not need this kind of cover because it will not cost extra to change your ticket and travel later. However, if you have a non-refundable ticket or you are travelling on a chartered flight and would have to pay more to buy a new ticket to get you to your holiday destination, this kind of cover can be worth having. Some policies also offer cover for missed departure of internal flights in the country (or continent) you are visiting, which is useful if your trip involves this sort of travel.
The circumstances in which you can claim are carefully defined. The policy should pay out if you missed your flight (or whatever) because public transport let you down as a result of bad weather, mechanical breakdown or industrial action (unless advance warning was given). It is less common to be covered because your own mode of transport breaks down or because you are involved in an accident. You definitely will not be covered because you did not leave enough time to get to the station, port or airport.