Alongside everyday costs, travel costs are rising. Awareness of the risks associated with travel would also appear to be increasing, making Canadians more willing than ever to buy travel insurance. That said, they more frequently may need assistance choosing coverage, as the plans and the conditions under which Canadians travel become ever more dynamic.

Although it is early for statistics to be available, social media pictures from the recent March break holiday, for instance, show empty airports, purportedly the departure lounges for flights to United States destinations.

In a new note from Morningstar DBRS, the ratings firm cites data from OAG Aviation Worldwide Limited (OAG), a global travel data provider. When comparing forward bookings made as of March 2025 with those made in March 2024, OAG found a decline of more than 70 per cent in bookings to the U.S. in the coming months. (Airlines claim the softness in the transborder market is not as significant as indicated by the OAG data.) 

“Canada-U.S. air travel activity has slowed, and this trend could be exacerbated over the summer months, as forward bookings appear to have dropped considerably,” the firm’s researchers write in a commentary on the credit risk profiles of Canadian airlines, entitled The Summer of 2025 May Not Bring Much Joy for Canadian Airlines. 

In 2024, Canadian travellers took 39-million trips to the U.S. In February 2025, the number of Canadians flying home from U.S. destinations declined 13.1 per cent. Those returning by automobile dropped 23 per cent, year-over-year. 

Those studying travel patterns say this is in part because air travel is frequently booked long in advance, while car trips are more spontaneous, perhaps better reflecting sentiment at the time. “It’s starting to come through in some of the bookings,” says Will McAleer, executive director of the Travel Health Insurance Association (THIA). “However, current travellers, they’re all booked (in advance).” 

Pamela Wong, head of affinity at Manulife Canada agrees, saying advanced bookings are typical for more expensive travel. “At an aggregate level, there haven’t been any big shifts,” she says, “but I think the mix of travel will likely shift.” 

In short, they say Canadians still want to travel. A recent survey conducted for Blue Cross of Canada found that would-be travellers are simply getting creative in the face of rising costs, at least, and likely in the face of rising concern about travel to the U.S., as well.

Conducted in November 2024, the annual survey focused on the cost pressures related to travel, on geopolitical uncertainty, climate concerns and the socially conscious choices being made, particularly by younger travellers.

It found 81 per cent of those surveyed said they are changing their travel habits due to cost, a 17 per cent increase over last year’s figures. Among those surveyed, 36 are already reducing the number of trips they take, 35 per cent are seeking less expensive accommodation and destinations, 25 per cent are staying closer to home and 22 per cent are shortening their trips.

The November Blue Cross survey of 2,072 Canadians further found that 47 per cent said they were less likely to visit the U.S. in the next 12 months, a sentiment which has not been probed or revisited yet in light of recent events.

When asked if Canadian’s shifting travel patterns are of consequence to insurers, those who discussed the matter with the Insurance Portal were unconcerned – the general sentiment being that Canadians will continue to travel, they will likely just be more selective about where they go.

Not all policies are created equal 

Traditionally, price has always been a large deciding factor for those purchasing travel insurance. “It was always a high factor because travel insurance, if you’re in the least unhealthy, it can be very expensive,” says Sylvain Lamanque, senior vice president with SecuriGlobe Inc. He also notes that there have also been premium increases in the past 12 to 14 months, up to 30 per cent in some cases from some carriers. “So, from a behaviour standpoint, they (consumers) are shopping more.”

Across the board however, those discussing the matter said price today needs to take a backseat to a real analysis of the coverage available. This was always necessary, they note, but takes on a new importance in light of the fact that Canadians are seeking more diverse experiences.

Potentially, Canadians need an agent or an advisor’s experience in selecting coverage. Those in the business of selling, meanwhile, need to be aware that there are coverages available that can save clients a lot of money if the U.S. is not a factor in their travel plans.

Carriers covering U.S. costs, Lamanque points out, have those costs increased by 30 per cent, right off the top, because of the exchange rate alone. The country is also a notoriously expensive place to receive medical treatment. “What impacts cost is the claims experience – claims experience that most carriers are experimenting with right now,” he says. “From what we hear, their loss ratios are deteriorating. One of the key reasons is the cost of U.S. healthcare.” 

McAleer agrees. “The U.S. is the highest cost jurisdiction on earth to receive medical care,” he says, adding that those travelling to Europe and avoiding the U.S. altogether can likely realize some cost savings as underwriters recognize the lower treatment costs when deciding premiums. “That can allow for some pretty significant savings.” 

Obtaining the right coverage  

Those staying inside of Canada can enjoy even greater savings. Despite the relatively affordable premiums for interprovincial travel, however, many clients need reminding that the coverage is necessary. Blue Cross executives, Joanne Parent, vice president of national travel insurance sales and Joseph Russo, director, national travel and insurance say they anticipate at least 25 per cent of travellers who used to visit Florida and Arizona will be travelling in Canada in the future. 

“Some people will think that universal healthcare means that no matter which province you go to, you’re going to be covered. The fact is some medical bills will not be covered interprovincially. You need to take that into consideration,” McAleer says, adding that ambulance and air ambulance are not covered. “That can be very expensive if it isn’t covered.” Prescribed medications inside of the hospital also are not covered. “You want to make sure that you do have a travel within Canada policy. The great news is that those are very cost effective, simply because many of the costs are still covered.” 

Know that as travel patterns change, there are different options for travel insurance that maybe they haven’t been used to selling. - Will McAleer

For all travel, he further encourages consumers and their agents to remember three “golden rules.” These are to know your health, know your trip and know your policy.

“Know your health first,” he says. “Know what conditions you’ve got before you apply for that insurance.” Next, know your trip and understand all of the activities you plan to undertake to ensure that your policy will cover them. Finally, know your policy: Making sure that clients understand whether or not their policy is going to cover existing medical conditions and planned activities is absolutely vital, he adds. “You want to make sure that the type of activity is going to be covered under your travel insurance plan. Some policies will cover high risk activities. Others may not.”  

The assistance part of a travel insurance policy is also very important – this was noted by Wong and Parent, along with McAleer who points out that this assistance also needs to be available on the ground in the country of travel. “You want to make sure that there’s the ability to get you the help you need when you need it. It’s more than just being able to pay for the bill,” he says. “Know that as travel patterns change, there are different options for travel insurance that maybe they haven’t been used to selling.” 

Behaviours and purchasing patterns  

Where people have traditionally shopped for travel insurance strictly on price, with travel conditions that are more dynamic, sometimes changing daily, agents may be pleased to find that clients are more receptive and willing than ever to do the right amount of due diligence. “It needs to be part of people’s overall trip planning,” Wong says.

According to Blue Cross, 51 per cent of the Canadians surveyed for its travel study said they were more likely to purchase travel insurance today than in the past.

Broken down, according to the company: 

  • 26 per cent of Gen Z clients purchase travel insurance for some trips; 35 per cent purchase the product for all trips.
  • 27 per cent of Millennial clients purchase insurance for some trips; 34 per cent of Millennial clients purchase travel insurance for all trips. 
  • 22 per cent of Gen X clients purchase insurance for some trips; 40 per cent purchase for every trip.
  • 15 per cent of Boomer clients purchase insurance for some trips; 57 per cent purchase the product for all trips.

What is changing also, say industry watchers, is the timing during which Canadian travellers are making the decision to purchase travel insurance.

“Uncertainty and the climate have made customers buy a bit differently. They buy later usually,” Lamanque says. In past years, he says snowbird clients would buy in May for departures in November and December. Today they are waiting until October and November to make their decisions. “We’ve seen a softening in the snowbird market,” he says.

Driving this is the fact that many are on fixed incomes that are not stretching as far today, thanks to inflation. “They’re reducing the length of their trip. Some are changing destinations,” he says.

He adds also that trip cancellation insurance is popular. “They’re being very careful about that.” 

At Blue Cross, Parent and Russo say the company’s cancel-for-any-reason (dubbed CFAR) coverage is also popular with clients, as are provisions like the company’s flight delay service. “It maybe wasn’t so popular a few years back, but clients really appreciate this,” Parent says. Russo adds: “Everyone is finding their own way to make travel work without breaking the bank.”