Nearly half of Canadians planning to travel this summer do not intend to purchase travel insurance, according to a new TD survey, even as 29% of those polled said they could cover no more than $300 in emergency costs without coverage.
The findings point to a protection gap forming precisely as household budgets tighten. Overall, 35% of Canadians said they plan to spend less this summer than last, with 40% of those cutting back citing higher transportation costs and 62% redirecting spending toward essentials, including groceries, fuel and housing.
Patricia Foley, associate vice president, life, health and credit protection at TD, said removing insurance from a stretched travel budget carried real financial risk.
"When travel budgets are already stretched, skipping travel insurance might feel like an easy place to save, but disruptions like a trip cancellation or unexpected medical emergency can quickly become costly. Having the right travel insurance coverage could help protect your finances and your trip, allowing you to travel with greater confidence," she said.
The survey reflects a pattern the Canadian travel insurance market has long struggled to close.
The penetration rate of travel insurance among Canadian travelers reached 46% in 2025, up from 31% in 2020, but still well below benchmark markets such as Sweden at 88% and the UK at 78%, according to data from Hellosafe. Only 32% of Canadian leisure travelers in 2024 purchased comprehensive coverage encompassing both emergency medical and trip cancellation protection.
The financial exposure for uninsured travelers is significant.
As of May 2025, Ontario's provincial health plan no longer covers any healthcare costs incurred outside Canada, meaning travelers must purchase insurance or pay entirely out of pocket. Documented cases include a three-day ICU stay in Florida costing approximately $25,000 US with minimal provincial reimbursement, and air ambulance costs that typically range from $20,000 to $50,000 or more.
The gap between risk and protection is a growing commercial opportunity.
The Canadian travel insurance market generated $784 million in revenue in 2024 and is projected to reach $2.17 billion by 2030 at a compound annual growth rate of 18.5%, according to Grand View Research, driven by post-pandemic travel recovery, rising awareness of medical costs abroad and the shift to digital distribution.
Meanwhile, some 67% of travel insurance contracts in Canada are now signed online, and analysts anticipate penetration reaching 52% among Canadian travelers by 2030.
The millennial and Gen Z segments represent the largest untapped opportunity and the biggest challenge. Nearly two-thirds of millennials are currently traveling without coverage, making them the least likely demographic to insure their trips, according to data from Emergency Assistance Plus.
TD's own 2024 survey data found that, among Canadians who had experienced travel disruptions, 32% incurred out-of-pocket expenses averaging over $2,600, a figure that dwarfs the cost of a standard travel insurance policy.
Rising fuel and aviation costs are among the most cited pressures this summer.
Some 44% of respondents said fuel costs were influencing their travel decisions, and of those planning to travel, 61% said they were actively reducing costs. Domestic travel has strengthened as a result, with 76% of those planning trips intending to stay within Canada and 55% exploring their own province.
Buy-Canadian sentiment is also running high. Some 79% of respondents plan to support local or Canadian businesses, with 48% describing that intent as stronger than last year.
Gen Z is the most likely generation to increase summer spending, with 24% planning to spend more, the highest of any age group. Some 32% of Gen Z respondents said social pressure was influencing their spending decisions, more than double the national average of 14%, with FOMO-driven experiences, trending restaurants and shareable activities among the top spending categories.
At the same time, 64% of Gen Z respondents who had received wedding invitations said they had declined or were being more selective, significantly above the general population figure of 48%.
Jeet Dhillon, senior portfolio manager at TD Wealth, said the dynamic was a familiar financial challenge for younger adults.
"Social media can sometimes make it feel like you have to say yes to every experience. Having a clear sense of what you value and what fits your budget can make it easier to enjoy summer without letting impulse or pressure derail your financial plans," Dhillon said.
The broader picture is one the insurance industry has grappled with for years -- the cost of a travel policy is modest relative to the losses it covers, yet consumer take-up remains well below where the risk exposure would suggest it should be. With budgets tighter and provincial health safety nets narrowing, that gap may become harder to ignore.
