Travel protection insurance is a good way to get some peace of mind when you book a villa in Italy. This kind of policy can cover a number of unforeseen events that could prevent you from traveling, and can help you recover the cancellation penalties that can be associated with letting go of your villa.
Coverage can be given for medical reasons–including pre-existing conditions, but read the policy carefully on this one. Other coverages include loss of luggage, strikes, severe weather, etc.
There are many reputable providers of travel protection insurance, and you should review several policies because there can be differences in coverage.
CSA Travel Protection has a helpful FAQ page that can get you started and answer some basic questions:
Other established firms include:
Travel Insured: www.travelinsured.com
Access America: http://www.accessamerica.com
Also, in the US, check with your local AAA for their policies.