TORONTO — Skittishness amid the U.S.-Canada trade war, economic uncertainty and job loss concerns has made travel insurance a ready sell. It’s quite the change from the days of sometimes hearing “no thanks” or “don’t need it” after a travel agent’s travel insurance inquiries.

In fact, these days some clients are beating agents to the punch.

“We have definitely seen an uptick in cancellation insurance. And now clients are asking us, before we have a chance to offer it to them, about insurance,” Total Advantage Travel & Tours president Robert Townsend told Travelweek. “A lot of people are concerned that the tariffs will cost them their jobs. They don’t want to leave it to chance.”

Townshend said almost every single one of his agency’s clients has made an insurance inquiry on all new bookings since the tariffs were first announced. Most people want one that includes a ‘cancel of any reason’ clause.

Travel advisor Gilbert Manza with Executive Travel Services Inc. said the ‘any reason’ cancellation options, especially those offered by many tour operators, are popular with his clients. “They still want to go, however they want to ensure that their monies are protected in the event of a job loss, or other major economic situations and not exclusively just medical.”

Travel insurance comes with some of the highest commissions in the industry, making it a lucrative, and smart, sell for agents.

For travel advisors who haven’t seen a travel insurance jump in recent weeks, it’s often only because travel insurance is already such a hot seller, going back to COVID-19. If anything brought home to travellers the need for vacation protection, the pandemic was it.

That’s the case for Jennifer McPherson with TurnKey Travel, who has had a busy start to 2025. “I do 75% of my booking in the first quarter of the year, plus we have so many clients in destination during the winter months, coupled with the craziness of the winter weather delays.”

McPherson said her clients have not increased the amount of cancellation insurance they’re buying, “but that’s because most of them have always understood the importance of it, so it’s part of their travel package from the beginning. The ease with which travellers agree to travel protection has changed. I’d say that since COVID there’s been a marked shift in the average consumers’ acceptance of cancellation insurance. That’s why it’s key for advisors to stay current with their insurance training and understand all of the details. I know that it can be a lot of information but that is what sets good advisors apart.”

She added: “As a full-service advisor I feel strongly about protection when selling any sort of travel so it is embedded in my process, whereas some travel advisors are intimidated by insurance and are fine when their clients decline coverage or look elsewhere.”

She said her clients rely on her to help them navigate all the travel protection choices out there, from different credit cards to suppliers to refundable fares (or not) from the airlines.

When it comes to those cancellation waivers for packages, for instance, “the client needs to understand that the waiver does not cover them in destination for all of the other benefits that a travel insurance policy would, such as Unlimited Trip Interruption. I think that particular benefit has been a huge selling feature post-pandemic as many credit cards no longer include it or it is limited.”

With already strong insurance sales, Lush Life Travel’s Sheila Gallant-Halloran isn’t reporting an uptick either. But she did note another development in these strange trade war times: “What I am noticing is a recent hesitation among Canadian clients when it comes to booking with U.S.-based companies, especially in light of global uncertainty and geopolitical tensions.”

She added that not only are her clients vehemently opposed to U.S. destinations, increasingly, they don’t want to connect through the U.S. either. Reports of heightened scrutiny for non-U.S. travellers at the border will no doubt see those numbers climb higher.

NEED-TO-KNOWS FROM ALLIANZ & MANULIFE CANADA

Dan Keon, VP, Marketing & Insights, Allianz Global Assistance Canada, said Allianz is seeing “some changes in destination mix, with a slight shift away from U.S. policies in the first three months of the year compared to 2024. Time will tell whether this shift is an anomaly or a longer term trend.”

If a client was booked to travel to the U.S., but now wants to change their destination, what happens?

Says Keon: “Trip destination may be a factor in a travel insurance policy, depending on the provider. If travellers change their destination, they should check to see if their travel insurance policy needs to, or can be, adjusted to meet their needs.”

He adds: “Allianz Global Assistance recommends that all travellers obtain trip cancellation insurance to protect their travel investment. Trip cancellation benefits typically include specific covered reasons for cancellation, and cancelling due to change of mind generally is not covered unless a customer has purchased a policy with ‘Cancel Anytime for Unknown Reasons’ benefits. It is important that policyholders review their policy to fully understand what situations are eligible for coverage, and which scenarios are not.”

Manulife Canada’s Head of Affinity, Pamela Wong, says “while it’s early days to see meaningful changes in travel trends, Canadians may be rebooking trips to alternative destinations. The good news for Canadians is, there’s a lot of flexibility when purchasing travel insurance. For example, when purchasing medical-only products, they can be refunded up until the day of departure.”

She advised purchasers to read the specific terms of the policy to understand what is and isn’t covered. Trip cancellation insurance covers a wide range of factors, many of which may surprise travellers (and their travel advisors). Trip cancellation insurance typically covers illness or Injury (if you, a traveling companion, or a family member falls ill or gets injured before the trip); death (the death of you, a traveling companion, or a family member); weather (severe weather conditions that prevent travel); natural disasters (events like hurricanes or earthquakes at your destination); legal obligations (jury duty or being called to court); and job loss (unexpected job loss or layoff).

“Changing your mind or deciding not to travel for personal reasons is typically not covered by travel insurance,” said Wong. “Some policies offer a ‘Cancel For Any Reason’ (CFAR) option, which allows you to cancel your trip for almost any reason not covered by standard policies. This typically reimburses a percentage of your prepaid, non-refundable costs.”

Jennifer Waver, AVP, Head of Travel Distribution, Manulife Canada, told Travelweek that after COVID, “travel insurance witnessed a huge spike in sales.”

According to Waver, based on a survey conducted by the Conference Board of Canada, 82% of Canadians travelled with travel coverage in 2022.

“We have also seen more Canadians looking at trips as ‘investments’ and spending more per trip, with bucket list trips on the rise. Canadians are more likely to buy travel insurance for these kinds of trips to protect their investment,” said Waver.

There’s even something called ‘protection stacking’. “There are various types of travel insurance available, so you can stack for insuring what you want, when you want it,” said Wong.

For example, you can have a multi-trip emergency medical plan in place, which is a type of travel insurance designed for frequent travellers. “Instead of purchasing separate medical coverage for each trip, this plan provides coverage for multiple trips within a year. Then if you’re booking a vacation, you can purchase individual non-medical coverage (like trip cancellation or interruption insurance) to protect that investment.”

This article appears in the April 10, 2025 issue of Travelweek; click here