The US travel insurance market is valued at $7.71 billion in 2025 and is forecast to reach $16.12 billion by 2030, advancing at a 15.9% compound annual growth rate - and new survey data from Allianz Partners suggests the behavioral shift driving that growth is still accelerating. The likelihood to purchase travel protection rose from 41% of US travelers in 2025 to 44% in 2026, Cancel For Any Reason coverage purchases have nearly doubled from 6.9% of policies last year to 13.5% in 2026, and travel insurance penetration in the United States reached 40% in 2025, up from approximately 28% pre-pandemic.
The CFAR surge is particularly significant. The increase is evident across all top 20 summer destinations, suggesting a broad behavioral shift rather than a response to any single event. Purchasing timelines are also compressing - the average number of days between trip deposit and insurance purchase dropped to 62 days this year from 71 in 2025, indicating that travelers are treating insurance as an earlier and more deliberate part of trip planning rather than a last-minute addition.
A regulatory shift is amplifying demand for standalone policies. A proposed airline compensation rule that would have required carriers to pay passengers between $200 and $755 for airline-caused delays was withdrawn, leaving no federal rule requiring airlines to compensate travelers for delays and making travel insurance a more important financial safety net for disrupted journeys.
The demand picture is grounded in genuine anxiety. Seven in 10 Americans plan to travel this summer, according to the Allianz Global Travel Confidence Index, but a more cautious mindset is taking hold despite robust demand. Just 19% plan to travel abroad - significantly below the global average of 36% - with half citing stricter border controls and travel advisories as influencing their destination choices.
Nearly two in three Americans surveyed (63%) said they are concerned about the global geopolitical situation, and 62% cited safety and security as factors shaping their travel decisions. More than two-thirds (68%) now factor environmental risks including hurricanes, wildfires, flooding, droughts, tornadoes and heatwaves into their destination choices, and nearly half (47%) rank extreme weather among their top travel concerns this summer.
The most common practical worries centre on disruption and health: 56% cited significant travel delays and trip cancellations, 46% expressed concern about falling ill on vacation, 44% raised the prospect of lost or delayed luggage, and 42% identified a medical emergency while travelling. Those concerns are grounded in current conditions - staffing shortages, record demand, long security lines and air traffic controller shortages described by federal audits as the deepest in more than a decade are all converging ahead of the 2026 peak travel season.
The survey's generational breakdowns point to where growth is concentrated. Americans under 35 are significantly more likely (78%) than older generations to factor environmental risks into vacation decisions, while Gen Z (55%) and Millennials (54%) expressed heightened concern about extreme weather. Both groups are increasingly acting on those concerns at the point of purchase, with 60% of Gen Z and 54% of Millennials now buying travel insurance.
Women are significantly more likely than men to skip summer travel altogether (36% vs. 24%), reflecting disproportionate concern about safety and global instability, while men are more than twice as likely as women to plan a trip to Europe this summer (11% vs. 5%) - a gender gap that points to distinct risk perception patterns worth tracking in product design and marketing strategy.
Emily Hartman, general manager at Allianz Partners, said travelers are investing more thought into how they protect their trips. "Travelers today are facing a more complex landscape than ever before. With risks like severe weather and disruptions on the rise, travelers are being more thoughtful about planning," said Hartman. "As travelers invest significant time and money into vacations, planning ahead and protecting those trips with travel insurance can provide critical peace of mind in an unpredictable world."
The Allianz data suggests that shift is still accelerating.
