Simmering tensions between Canada and the United States are increasingly rippling into the travel sector.
Canadian travellers are rethinking their cross-border plans, and at least one travel insurer has told Insurance Business that a growing number are seeking clarity around travel insurance policies that may be impacted by the shifting political landscape.
According to Allianz Global Assistance Canada, recent months have seen subtle but noticeable shifts in traveller behaviour.
“When it comes to travel habits, we have seen some changes in trip destinations with a slight shift away from US policies in the first quarter of the year compared to 2024,” said Dan Keon, vice president of marketing and insights at Allianz Global Assistance Canada.
“We have also seen a slight increase in benefit inquiries related to US travel, for example, questions related to covered reasons for cancelling or delaying a trip.”
Statistics Canada has reported a 31.9% year-on-year plunge in the number of Canadian-resident return trips by car from the US in March. January and February also saw significant declines in US car travel by Canadians, the likes of which were last recorded during the COVID-19 pandemic.
The drop in US travel comes as many Canadians embrace boycotts of American vacations and products, after Trump threatened to use “economic force” to annex Canada and impose devastating tariffs.
This is echoed in recent findings from the Travel Health Insurance Association of Canada (THIA), whose 2025 Smart Traveller Survey highlighted the primary reasons why some Canadians are choosing to avoid travel to the US this year.
The top concern, cited by 57% of respondents, was a desire to support Canada during the ongoing tariff dispute. Political leadership in the US followed closely at 51%, while 34% of respondents pointed to the weakened Canadian dollar as a deterrent.
These sentiments are having a direct impact on travel insurance claims and inquiries, according to Allianz Global Assistance Canada. Keon explained that the most common claims associated with cross-border travel disruption fall under benefits such as trip cancellation, trip interruption, trip delay, and flight delay.
“The vast majority of travel insurance policies will have specific covered reasons listed within the policy,” Keon said. “It is important that policyholders review their policies in detail before leaving to understand which situations are eligible and which are excluded.”
Although no unique risks have been identified that would impact business travellers differently from their leisure counterparts, Keon emphasized the importance of understanding one’s coverage in the current climate.
“The US continues to be a major destination for Canadian travellers, and it is important for all Canadians to ensure they understand the local situation wherever they choose to travel,” said Keon.
Beyond insurance concerns, geopolitical uncertainty is fueling a broader sense of caution. With bilateral tensions inflamed by tit-for-tat tariffs and diplomatic posturing, Canadians are seeking ways to protect their travel investments and avoid unexpected complications.
“Regardless of the current political climate, travel medical insurance is always a must-have for all Canadians travelling abroad, whether they’re visiting the US or elsewhere,” Keon said.
To navigate this period of uncertainty, Allianz recommends several steps for travellers heading to the US:
Whether travelling for work or leisure, careful planning, timely information, and robust insurance coverage are critical tools for managing cross-border uncertainty in 2025, Allianz stressed.
