Young travelers are the least likely to purchase insurance before going abroad, even though they are among the most likely to have an accident while traveling. How can insurers convince them to better protect themselves? 

A study by Milesopedia Canada, a website specializing in credit card and rewards program comparisons, and insurance firm soNomad, published in late July, indicates that 58% of Canadian travellers who travel without travel insurance are under the age of 35. 

In fact, more than one in four travelers aged 18 to 34 (29%) do not buy it. A "saving" that could prove costly, especially since 41% of uninsured travelers go to the United States, "where medical costs are among the highest in the world," Milesopedia points out in the article. 

An exclusive report prepared by Signal49 Research for soNomad, cited by Milesopedia, reveals the main reasons given for traveling without insurance: 

  • 19% of uninsured travelers consider it too expensive; 
  • 23% feel they don't need it; 
  • and 41% consider their trip too short to justify purchasing a policy. 

“These three reasons share a common point: they are based on an assessment of risk, not its actual absence,” the website noted. 

Louis-Philippe Morisset, head of pricing and product development for travel insurance at Desjardins General Insurance, shares this observation. “Even if you’re going away for three days, you might need to cancel before departure; it’s also possible that an accident could occur just a few hours after your arrival,” he explains. 

“Many young people don’t know if they’re covered or will leave without travel insurance,” confirms Nadia Goyette, Assistant Director of Insurance, Products and Partnerships at CAA-Quebec. “Yes, some people have the wishful thinking that nothing will happen to them, or they believe it’s not worth getting insurance for a few days or for a trip close to home…What’s reassuring is that we’ve seen that percentage decrease over the past four years,” she added. According to her, the pandemic has triggered a collective awareness of the importance of having cancellation insurance. 

The geopolitical upheavals of recent years have also contributed to highlighting the usefulness of travel insurance. 

However, price alone doesn’t explain this reluctance to buy insurance. “We need to look beyond the question of budget,” says Nadia Goyette. “Young people want to have experiences, but they want to maximize every dollar spent. So, they’ll look for the cheapest flight dates, stay in hostels or Airbnbs because it’s cheaper than a hotel. But they don’t budget for travel insurance, even though at their age, it’s very affordable.” 

Sylvain Lamanque, Senior Vice President of Operations at SecuriGlobe, agrees. “We’re not talking about thousands of dollars, but a few dozen, or at most one or two hundred,” he notes. “This is the least expensive customer segment to insure.” 

“There seems to be a lack of understanding of what travel insurance is for,” he adds. “Many people of all ages mistakenly believe that their Quebec health insurance card (RAMQ) covers them fully and everywhere in Canada, for example.” 

More adventurous travelers 

The Milesopedia and soNomad study points out that young adults are more likely to participate in risky activities while traveling, particularly adventure sports and water sports. 

However, coverage for accidents occurring during these activities cannot be obtained after the fact. And, more importantly, it is generally sold as an add-on to basic travel insurance. 

“It’s a paradox,” notes Louis-Philippe Morisset. “It’s important to remind them that their basic insurance coverage, when they have it, doesn’t include certain activities.” 

Young tourists also stay in hostels and use public transportation more often, which exposes them to other risks. The most frequent causes of injury while traveling are road accidents, falls, and drowning. 

“It’s precisely during these activities that they can get injured,” adds Nadia Goyette. “Even going to the mountains, to Vermont or New Hampshire, close to home, it’s possible to sprain an ankle and need to be airlifted. The hospital bill will be much higher than what insurance would have cost.”

How can we raise awareness among young people?  

Born into a digital world, younger generations represent a distinct clientele that requires a different approach, insurers acknowledge. 

“You don’t speak to a snowbird who’s going to spend the winter in a warm climate the same way you speak to a young person who only has three weeks of vacation all year,” explains Nadia Goyette. “Among 18- to 34-year-olds, we have students, some who live with their parents and others in apartments, but we also have young families and homeowners.”

Unsurprisingly, social media is a key channel for communicating with them. “Young people get their information on their cell phones, unlike their parents or grandparents who subscribe to our print magazine or newsletter,” notes Nadia Goyette. “So, we create short videos on Facebook, Snapchat, or Instagram to explain the issues surrounding insurance policies.” But few initiatives directly target young people, laments Sylvain Lamanque. “We need a coordinated awareness campaign by the major insurers,” he suggests. 

The experience of a loved one can also serve as a wake-up call. “When you know someone who has had a costly mishap, that’s when people realize the importance of being well-insured when traveling,” says Lamanque. 

Different consumer habits 

Many travelers with a credit card feel they are sufficiently protected. This isn’t always the case. “You have to take the time to read the credit card agreement to understand what is and isn’t covered,” notes Nadia Goyette. “It’s also possible that if the travel reservations weren’t paid for with the card, the coverage doesn’t apply.”

Goyette also points out that some young adults still considered dependents of their parents may be covered by family insurance. Younger travelers are more likely to purchase their travel insurance online: 38% do so, compared to 27% for all age groups, according to Milesopedia. 

Nationally, the company reports that approximately 9.2 million travel insurance policies are expected to be sold this year, compared to 9.5 million in 2019. The challenge for the industry is therefore clear: convincing the least expensive travelers to insure to purchase coverage before an unforeseen event reminds them of the cost of not having it. 

Quebec travellers even less protected 

By combining data on the generational gap with travel insurance uptake rates by province, Milesopedia concludes that young Quebec travellers are the least likely to protect themselves before travelling abroad. 

Quebecers in fact have the lowest travel insurance coverage rate in the country, at 73%, 11 percentage points below the Canadian leaders, British Columbians.