What Does Travel Insurance Actually Cover? (and Best Plans for Cruises, Flights and Road Trips)

Alevin Chan

Alevin Chan

Last updated 23 August, 2022

COVID-19 has made travel insurance even more important than before. Here’s an explainer on what travel insurance actually covers, and what you should pay attention to.

If there’s one good thing that came about due to the COVID-19 pandemic, it’s that it has brought travel insurance the attention it deserves. 

When planning an overseas trip, the last thing anyone wants to think about is something going wrong and spoiling the trip. But between sudden illness, flight cancellations, lost baggage, and road accidents, Murphy’s Law is real. Things can and do go wrong, even on holidays. 

Hence, it makes good sense to ensure there is proper insurance coverage to help you out should an emergency take place during your trip. 

Additionally, travel insurance plans can also offer several useful benefits and perks that you can access even after your trip has ended. 

Let’s take a closer look at what travel insurance actually covers, as well as the coverage and benefits to pay attention to for cruises, flights and road trips. 

Understanding travel insurance

Like all insurance policies, travel insurance becomes easier to understand when we break it down into its core components. 

Because travel insurance is designed to protect the risks of travelling overseas, a basic travel insurance policy covers the following areas:

  • Overseas emergency and medical costs
  • Personal belongings
  • Trip complications or disruptions

Overseas emergency and medical costs

Should you run into an accident or suffer an injury while in another country, the last thing you need is to worry about how you’re going to pay your hospital bills. (Or, in a fatal accident, how to bring your loved one’s remains back to Singapore). 

It’s not that you won’t be treated if you can’t pay – medical services are morally obligated to save lives after all. However, if you do not pay for the emergency treatment you received, you may be at risk of getting arrested, or sued by the health services provider. 

Hence, it’s only good sense to have sufficient travel insurance, just on the off-chance that you really end up requiring it. 

Besides, some travel insurance plans also offer benefits for follow-up treatment upon your return. This is not only useful for saving you from further medical expenses, it can also allow you to opt for treatments not covered by your Medisave plan. 

Travel insurance is also helpful even for non-emergency situations. Think, toothaches or dental problems that can occur without warning, getting a fishbone stuck in your throat, a bad cut requiring stitches, spraining your ankle while dancing for TikTok… you get the idea. 

While these occurrences are for the most part more of an annoyance than a serious threat, having a travel insurance plan will save you having to Google “cheap clinic near me” when you’re bleeding all over the town square.

A note on COVID-19

Cover for COVID-19 has become widely available in travel insurance plans but it is important to note that the benefits and claims limits are pegged at a fraction of the sums assured. 

For instance, a certain policy may offer up to S$200,000 in overseas medical cover, but only S$20,000 for COVID-19 medical treatment. 

This also extends to other benefits, such as for trip cancellations (see below).

Personal belongings

International travel is such a well-oiled machine that most of us take for granted the massive logistical effort required to make sure our luggage gets to the same destination as we do – preferably at the same time. 

Even items that we carry on board or on our persons can become damaged, lost or stolen – a costly event given our increasing love for expensive electronics like mobile phones, tablets, laptops, bluetooth speakers and cameras. 

The fact is, damage, loss or theft of personal luggage, equipment and belongings can and does happen when travelling – driving home the irony that you only brought your Nikon along because you wanted to capture the majestic views of Provence’s lavender fields.

Yes, material goods can always be replaced, but being able to recoup the cost of doing so partially or fully goes a long way in soothing the pain. 

That’s where travel insurance comes in – it offers benefits that offset the cost of replacements or repairs for personal belongings while overseas. This gives you the option to, say, simply buy more winter wear (and be reimbursed for it later on), instead of camping out at the airport to wait for your luggage, likely in vain.

However, do note that most policies have limits on how much you can receive for specific belongings. If you need to bring along a particularly valuable item, you may want to consider a specialised plan or policy to hedge your risk. 

Trip complications or disruptions

The third core component of travel insurance concerns conveyance – or complications or disruptions that affect your trip. 

This is perhaps best illustrated by the misfortunes of those who bravely signed up for a 2020 cruise-to-nowhere, only to have their trip cut short when COVID-19 made an unwelcome appearance on board. 

Even without a pandemic lurking in the background, trip curtailment, disruption and even cancellation can happen for a variety of reasons, ranging from planes being grounded due to bad weather, to sudden personal and family events that require a last-minute change in plans. 

Having to cancel or change your trip will also mean not being able to make use of flights, hotel bookings, or attraction tickets that you have already paid for, some of which may be non-refundable. 

With a travel insurance plan, you may be able to receive reimbursement for the cost of unused bookings or tickets, whether in part or in full. This can save you from wasting your hard-earned money.

It is a good idea to familiarise yourself with the limits of such benefits, as well as the specific conditions under which you can make a claim (you may be required to provide proof that your refund request was rejected by the attraction, airline or hotel first when making a claim, for instance). 

What to look for when choosing travel insurance for different types of trips

Any good travel insurance plan will include benefits that cover all three core components discussed above. However, depending on the mode of travel, you may wish to place greater emphasis on certain benefits.


The good news is that you’re far more likely to die in a road accident than on a flight, so the risk of serious injury or death here is statistically very low. Even plane crashes, as dramatic as they sound, have a 90% survival rate

What is more likely to happen is losing your personal belongings, or having your flight delayed or cancelled. As such, it is advantageous to choose a travel insurance plan that covers flight disruptions and has high claims limits for your travel belongings.

Allianz Travel Insurance offers up to S$15,000 cover against trip cancellation, up to S$7,000 for lost, stolen or damaged baggage (with up to S$1,500 single-article limit), and up to S$1,400 for luggage delays. 

Don’t forget that your credit card may also offer tree travel insurance.

For instance, the Citi PremierMiles credit card offers up to S$1 million in personal accident benefits and up to S$40,000 cover for overseas medical expenses. You can also claim up to S$1,000 for loss of personal baggage, S$100 per 8 hours of baggage or flight delays, and up to S$500 for trip cancellation. It’s not the highest cover, but it’s free and automatically applied when you charge your flight to the card.  

Road trips

If you’ve decided to take a road trip up to Malaysia, or plan to drive a rental car overseas, your main focus should be on emergency roadside assistance and overseas medical expenses. Afterall, you don’t want to be stuck with an overinflated bill for towing services or changing out a flat tire. 

Importantly, you will also want a reasonably high benefit for personal liability, in case you cause damage or injury to a third party. 

Choose car insurance that includes 24/7 roadside emergency and medical assistance for drivers involved in an accident in West Malaysia. For those who regularly drive into Malaysia, there is also an Extension Rider that provides additional benefits for roadside assistance, medical expenses and personal accident cover. 

The plan also offers robust personal liability cover – up to S$5 million cover for property, and unlimited cover for injury and death.

If you’re driving a rental car, your rental fee will likely include the necessary auto insurance (if not, you’ll need to pay for it). 

You should be careful to read the auto insurance policy terms and conditions carefully, paying special attention to the policy excess, which is the sum you have to pay when making a claim. 

If the excess is too high, you should negotiate to lower it by paying a higher rental fee, or consider using another agency. You do not want to be stuck with a bill you can’t afford just because that mountain goat decided to get friendly with your rental car. 

Pleasure cruises

For pleasure cruises and cruises-to-nowhere, you may want to pay extra attention to trip curtailment cover. 

While cruise ships have medical teams on board to attend to medical emergencies, vessels may have no choice but to return to port during a COVID-19 outbreak, or an event that is beyond the crew’s ability to handle. 

Afterall, being stuck together with your fellow cruise participants means there’s no such thing as breaking off and continuing your holiday on your own. 

DBS TravellerShield Plus offers generous claims limits for cruise holidays. Policyholders will be covered for up to S$15,000 in journey cancellation or curtailment benefits (S$7,500 for COVID-19 reasons), making it ideal for high-value cruise trips. 

Also included are COVID-19 overseas medical cover of up to S$200,000 as well as up to S$100 per day (maximum S$1,400) for COVID-19 quarantine or hospitalisation. 

Conclusion: Don’t skimp on travel insurance

Clearly, there is a lot that goes into choosing a travel insurance plan. The key is to decide what benefits and coverage is important to you, and prioritise risks that are more likely to happen.

Of course, the best case scenario is that you never have to make a claim against your travel insurance policy. But if you do, it’s far better that you have a policy to fall back on. 

Read these next:

Best Travel Insurance Plans With COVID-19 Coverage
Best Travel Insurance In Singapore (2022)
5 Common Mistakes People Make When Making A Travel Insurance Claim
When Is It Too Late To Get Travel Insurance
What Happens If You Catch COVID-19 Overseas On A Holiday

An ex-Financial Planner with a curiosity about what makes people tick, Alevin’s mission is to help readers understand the psychology of money. He’s also on an ongoing quest to optimise happiness and enjoyment in his life.