The financial burden of travel is weighing heavily on Canadians in 2025. Amid the struggling Loonie against the U.S. dollar, impending U.S. tariffs and other economic uncertainties, Canadians are getting far less value for their money when booking trips abroad.
These financial pressures are driving shifts in how and when Canadians travel. According to the 2025 Blue Cross Travel Study, 36% of respondents are reducing their number of trips per year, while others seek cheaper destinations, accommodations, and modes of transportation. Another study by Allianz Global Assistance Canada reports that 30% of Canadians plan to travel within the country, an increase from previous years.
“People are rethinking travel outside of Canada because of the lack of bang for their buck with the Canadian dollar,” says Martin Firestone, president of Travel Secure. “There’s a malaise in the travel industry right now. Travellers may fall off because they simply can’t afford the currency exchange.”
Beyond cost concerns, Canadians face heightened travel anxieties due to geopolitical uncertainty, international conflicts, and extreme weather events. Recent airline incidents, including mechanical failures and crashes, have also impacted traveller confidence.
Understanding travel insurance
With March Break approaching, it’s more important than ever to review your travel insurance needs.
There are two main types of travel insurance: travel medical insurance and trip cancellation and interruption insurance.
Travel medical insurance
This provides coverage for medical emergencies that occur while travelling outside your home province or country. It helps cover expenses related to:
- Emergency medical treatment (doctor visits, hospital stays, surgeries),
- Prescription medications related to a covered medical emergency, medical evacuation, and repatriation of remains.
Most working Canadians have access to this coverage through an employer-provided group benefit plan. However, even covered Canadians should review their policies.
While convenient, group benefit plans have limitations and exclusions that travellers may not be aware of, including: stability clauses for pre-existing medical conditions, limited coverage duration, and coverage gaps for high-risk activities (like skiing or scuba diving).
“A lot of people throw caution to the wind and say: ‘Oh, I’ve got an insurance plan at work.’ But you’ve to dig deeper to ensure you’re covered,” says Firestone.
Some Canadians rely on their credit cards for travel medical insurance. Similar to group benefit plans, this coverage is often limited and subject to specific conditions and restrictions.
Firestone advises against solely relying on credit cards for travel medical insurance.
“Credit card companies do not ask any medical questions, nor do they point out the stability clause for their insurance coverage,” he says. “There is no insurance application, which means they underwrite at the time of claim, and if travellers haven’t read and understood the fine print about that coverage, they could face problems.”
Another option — often the only one for retirees — is to buy travel medical coverage directly with an insurance company or through an insurance broker. These policies can provide a more comprehensive and customizable level of protection based on your unique health and travel profile. Facing cost pressures, it’s important to shop around, compare policies, and ensure you have adequate coverage for the duration of your trip.
Read more: Travel insurance: Why you need it, how to get it, and what to add to it
Trip cancellation and interruption insurance
Vacation spending is expected to average at $4,012 per household in 2025, per the Vacation Confidence Index, which is a big investment worth protecting.
If you need to cancel or cut short your trip due to unforeseen circumstances — including a sudden illness, injury or death, a natural disaster affecting your destination, or government-issued travel advisories after booking — trip cancellation insurance can reimburse the money spent on non-refundable expenses like flights and accommodations. It’s important to note that this coverage is not offered by most group benefit plans or credit cards.
“Canadians are buying trip cancellation insurance more than ever,” says Firestone, citing geopolitical uncertainty and extreme weather as key factors driving this trend. “If you spend $10,000 on a vacation villa for your family and that booking is non-refundable, you need this insurance. What if someone falls sick a day before you’re supposed to travel? You’ll be $10,000 out-of-pocket.”
Trip interruption insurance covers post-departure situations where your trip is interrupted or delayed due to similar factors. This helps pay for unexpected travel costs, such as last-minute return flights, extra hotel stays, and meals.
Read the fine print
Travel insurance policies contain various clauses, restrictions, and exclusions. One little known clause included is called the stability clause.
The stability clause refers to the period before your trip, during which a pre-existing medical condition must remain stable in order to be covered. This period is typically around 90 days, but it varies by policy and traveller profile. During this time, you must not experience any changes to your medical condition, any new medical conditions or symptoms, or any medication changes
“I can’t stress enough that you’ve got to ask the right questions,” says Firestone. “If you have group insurance or coverage through your credit card, you need to inquire about the stability clause and how many days you can be out of the country at one time.”
If you fail to meet these conditions, your claim can be denied. Insurance companies will review medical records, and if they find that your medication changed just days before departure, they may reject your claim entirely – which, if you’re in the United States, for example, could leave you with a five- or six-figure hospital bill.
“It’s a very scary thought,” Firestone adds.
Related: Will travel insurance cover a trip that was booked with reward points?
Review your coverage and travel with peace of mind
“Navigating the choppy waters of travel insurance can be daunting,” says Firestone.
He encourages travellers to review their coverage before taking a trip. Whether you need travel medical insurance or trip cancellation and interruption insurance, asking the right questions now can save you from financial hardship later. Insurance will add some cost to your vacation, but the peace of mind it provides is priceless when travelling the world.
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