In North America’s resurging travel insurance market, which international evaluators predict will reach US$18 billion within five years; backpack-toting Gen Zs (14–29 years old) and millennials (30–45) are challenging their political leaders to deflate tensions over the world’s longest land border and get back to the business of making travel safe. In Canada, involved in a tussle with US politicians over tariff and sovereignty issues, the country’s legendary snowbirds are finding other venues for their travel preferences by turning to the UK, Europe, Asia, and other provinces, leaving their younger fledglings to soak up the sun.

Destination shift
According to a Smart Traveller survey released by the Travel Health Insurance Association of Canada (THIA) in April, Canadians still planned to travel abroad, but preferred destinations had shifted, with 45% of Gen Zs insisting they would continue to travel to the US, while only 8% of baby boomers would head southbound. Instead, 24% would target Europe, and 36% would vacation within Canada. In the meantime, political tensions continued to deflect 51% of boomers from US travel, while 36% of Gen Zs were left adrift, most concerned about rising costs, and not enough paid time off.

With this pattern of youth travel emerging, we asked Dan Keon, President of THIA’s board of directors, how Gen Zs and younger 38 millennials balanced out their needs for protection and the mounting costs of travel.

“Many don’t connect insurance with those experiences,” he said, “or they assume they’re already covered, and nearly half believe a parent’s or credit card policy will suffice.” Citing poll data, Keon emphasised that while only 9% of boomers said they would travel uninsured, that number rose to 40% among Gen Zs. “The travel industry response,” said Keon, “has been to simplify access to products and modernise engagement. It’s now table stakes (a poker term for bet limits) for travel insurance options to fully integrate into travel booking journey trends.”

This tendency among younger travellers to offload ‘non essentials’ like travel insurance has been reflected in many prior surveys specifying that Gen Zs and a good number of millennials would prefer to put their hard-earned dollars into their travel experience – better boots for mountain climbing, photo equipment for whale watching, upgrading hotel rooms, etc. And if it takes cutting back on restaurant dining or forgoing a Taylor Swift concert to pull together a travel budget, so be it.

Connecting with the youth
Keon admits that connecting with this younger community is a challenge, but he tells ITIJ: “The shift we need is toward context and relevance. If someone is booking an excursion, a festival, or a more adventurous itinerary, that’s the moment to clearly show how coverage applies, not just for medical emergencies, but for delays, cancellations, and interruptions that directly impact the experience.

“Today’s travellers are building more dynamic, purpose-driven trips. If we align insurance with that reality, rather than treating it as a generic add-on, it becomes a much more natural and valued part of the journey. This is where working within key distribution channels (whether that’s OTAs, airlines, travel agencies, brokers or banks) to prime awareness and position travel insurance as a key part of the booking is critical.

“As THIA, we’re highly visible when these events occur, working with major media to explain what coverage applies, where gaps exist, and how travellers can protect themselves. The real-time education is key to closing the uninsured gap, including with younger audiences.”

While only 9% of boomers said they would travel uninsured, that number rose to 40% among Gen Zs

Asked how sellers can reach out to tech-savvy younger audiences, Keon admitted that “traditional policy documents are no longer how people engage. The industry is shifting to simplified digital-first education such as bite-sized summaries, interactive tools, and on-demand answers through chat or artificial intelligence (AI) to help drive understanding of what scenarios are covered and which are not.”

Destination choices
Meanwhile, according to one of the leading US travel insurance comparison sites, Squaremouth, the top 10 most insured destinations for American travellers this summer were the US itself, followed by Italy, Canada (which, despite political friction with the present administration, climbed up from fourth to third place, outpacing France), Spain, Mexico, Greece, the Bahamas, the UK, and Japan.

Furthermore, compared with last summer, Americans dug 24% deeper to pay their travel tab – $9,668 in 2026, up from $7,794 per trip last year – while cutting back on other expenses like dining out, shopping, home improvements, or investing. Also, Gen Z was showing a 22% increase in travel medical year-to-date, taking shorter trips rather than doing without them. On top of this, millennials appear to be absorbing price increases rather than cutting back fully on their trip lengths.

Note that in America, comprehensive plans are just that: more benefits, cancellations for any reason, baggage losses, and a full range of medical services. Travel/medical plans, meanwhile, are much abbreviated compared with Canadian medical emergency contracts, cover only medical emergencies (with quite specific pre-existing conditions limitations), and very few extend to the $5 million or $10 million coverage contracts provided by Canadian medical emergency plans, many of which allow quite sophisticated medical underwriting. Consequently, they are far less expensive.

As explained by Jackie Mondelli, Chief Marketing Officer at Squaremouth: “Gen Zs are completing their sales at a much higher rate than the previous year, after being quoted prices. The reason for that… Gen Zs have been made more aware of the value/need for travel insurance by the media recently, given all the unique global events that have occurred, from airspace closures, government shutdowns, military actions, etc. In the past, travel disruptions were really only ever associated with weather.”

If someone is booking an excursion, a festival, or a more adventurous itinerary, that’s the moment to clearly show how coverage applies

Overall, according to Squaremouth, travel insurance purchasers are choosing “safer, more politically neutral destinations” (for example the Netherlands, Ireland, and Norway) for their international travel, rather than the A-list countries tagged by the US State Department as deserving heightened vigilance. This is also generating a 20% purchase bump for cancel for any reason (CAFR) policy sales for travellers sensitive about potential military action, airspace closures, government border shutdowns or restraints, or just plain ‘fear’ of travelling to Europe. Consequently, domestic trip costs for early summer bookings grew by 20%, with costs increasing from $4,290 average in 2025 to $5,124 in 2026 – suggesting that many Americans may be putting their savings into “more elevated experiences” closer to home.

Bottom line, according to Squaremouth, is that “Gen Z is protecting its ability to travel by going for less time, not by skipping trips altogether”. And they’re staying in the market and doing it responsibly. Younger generations in the United States are attracted by AI-engineered enrolment and fulfilment services: targeted parametric devices facilitating payouts for washouts on beach days, missed connections, cancelled campouts – short-term inconvenience issues that can be rectified without dropping one’s phone – are a rising vogue.

Navigating the complexity of travel
Asked if insurers have a role in helping travellers manage growing travel complexity, Keon responded positively: “Increasingly, yes, though in a more modern, supportive role. Travel has become more complex and disconnected, and travellers are navigating it largely on their own. While insurers aren’t responsible for entry requirements, Canadian travel insurance providers are evolving into broader support partners, offering destination alerts, pre-trip guidance, and real-time assistance.

“Our survey shows geopolitical tensions and border concerns are now meaningful factors in travel planning. That creates an opportunity for insurers to provide timely, trusted information alongside coverage. The goal is to complement the journey and role that key distribution partners, including travel agents, continue to play. By helping travellers stay informed and prepared, Canadian travel insurance providers can reduce uncertainty and reinforce the value of travel insurance as both protection and support.”