The more important insurance story in Canada's sustained US travel pullback is not where Canadians are going instead - it is what they are buying when they get there. New industry data from the Travel Health Insurance Association of Canada shows a material shift in coverage mix alongside the destination shift, and it has direct implications for how travel insurance brokers should be structuring client conversations.
Statistics Canada figures showed Canadian land travel to the US fell 30.9% across all of 2025 - a drop of roughly 7.6 million vehicles - with the decline continuing into 2026 rather than reversing. THIA's Winter Smart Traveller Survey, conducted with the Harris Poll, found only 26% of Canadians planned to travel to the US last winter, a 37% drop from the prior year. The pullback was sharpest among boomers, where only 10% planned a US trip - a 66% decline from the prior year. THIA's more recent 2026 Smart Traveller Survey found Europe has overtaken the US as Canadians' top international destination, with 36% of respondents planning to travel exclusively within Canada this year.
Industry commentary on the trend has described more Canadians opting for cancellation and interruption coverage over medical coverage as the primary purchase. That is consistent with a pattern where trip planning itself has become more uncertain - travellers want protection against a trip falling through as much as protection once they arrive. For travel insurance brokers, it is a direct signal to lead client conversations with cancellation and interruption options rather than defaulting to medical coverage as the primary sell, particularly for clients whose travel plans have become more provisional or who are shifting to Canadian destinations.
That product-mix shift does not mean medical coverage is less important for Canadians still travelling to the US. Will McAleer, THIA's executive director, said US medical costs remain among the highest in the world, and that one unexpected trip to the ER can cost more than the vacation itself - sometimes leaving travellers with bills that follow them home. The Canadians continuing to travel to the US despite the broader pullback are disproportionately younger travellers less swayed by the political and tariff-related tensions driving the boycott among older cohorts. Those travellers carry the same US medical cost exposure as any other Canadian visitor, and they are statistically less likely to have purchased coverage than their parents or grandparents.
The shift toward European destinations reduces - though does not eliminate - the severity risk on the medical side. European countries generally carry lower medical cost exposure than the US, which could ease claims severity for travel insurers even where trip volume holds steady. For clients travelling to Europe, the coverage conversation is still necessary; it is simply a different risk profile than a US trip.
Domestic travel within Canada is the more structurally different case. For most medical emergencies, provincial health plans provide coverage at home, reducing the core case for comprehensive travel medical insurance on domestic trips. But domestic travel does not eliminate cancellation and interruption exposure - trip costs, accommodation bookings, and event reservations all carry disruption risk regardless of destination. For clients shifting from international to Canadian-only travel, the right broker conversation acknowledges both that their medical exposure has changed and that their cancellation and interruption exposure has not.
THIA's data also flags a longer-term underwriting concern that sits independent of the US travel story. The 2026 Smart Traveller Survey found 87% of Gen Z travellers planned to take part in risky travel activities including extreme sports, while only 40% of that same cohort said they would purchase travel insurance for their trip.
That combination - higher risk appetite paired with significantly lower coverage uptake - is a structural underinsurance problem that will not resolve when Canada-US relations normalise. An entire generation entering the travel market underinsured relative to their actual exposure is, for brokers and travel insurers alike, a larger long-term market challenge than the current destination shift.
