The 2025 Travel Insurance Barometer: United States Market Trends
The global travel insurance market is expected to reach $105.6 billion in 2025 , driven by a post-pandemic rebound and heightened consumer risk awareness. The United States leads this expansion , with its market growing to $7.71 billion and achieving a 40% traveler penetration rate —nearly double the global average. This reflects a structural shift in how American travelers perceive risk and prioritize financial security.
Travel Insurance Penetration Rate: How Does the US Rank Globally?
The travel insurance penetration rate represents the share of outbound travelers who purchase a policy. It is a core indicator of market maturity and consumer awareness. In the US, this metric reflects a cultural transformation post-COVID, with consumers increasingly aware of the financial risks of international travel.
The penetration rate in the United States reaches 40% in 2025 , up from about 28% pre-pandemic, demonstrating a strong shift toward risk-aware travel behavior. While the US remains below the United Kingdom (78%) and Canada (41%) , it remains well above the global average of 22% .
Projections indicate that the penetration rate in the US could reach 50% by 2030 , driven by embedded insurance, insurtech innovation, and persistently elevated risk perception among travelers.
The pandemic acted as a major catalyst for travel insurance adoption in the US. As outbound travel returned to 95% of 2019 levels by 2024, travelers exhibited a heightened awareness of health-related and logistical risks. This shifted insurance from an optional add-on to an essential part of planning, raising penetration from 28% pre-COVID to 40% in 2025.
Travel Insurance Premiums in the US (2025)
The average premium per travel insurance policy in the United States reaches $204 in 2025—significantly higher than in most Western markets.
- Longer and higher-cost trips
- Higher preferred medical coverage limits
- Strong demand for cancellation coverage (often $10,000+)
By comparison, average premiums in the United Kingdom are around £38 , reflecting shorter European trips and a highly competitive price-comparison ecosystem. In the US, premiums typically represent 4–6% of trip cost —a standard percentage applied to much more expensive travel.
Distribution of Travel Insurance Sales in the US (2025)
| Distribution Channel | Market Share (US, 2025) |
|---|---|
| Bundled with Trips/Flights | 55% |
| Direct Subscription | 30% |
| Other Channels | 15% |
Bundled insurance dominates the US market, representing 55% of all policies , largely due to strong integration within OTA booking flows (Expedia, Booking), airlines, and cruise lines. Direct purchases account for 30%, typically among experienced travelers seeking tailored coverage.
Digital Channels: Dominant in the US Market
- 75% of US travel insurance policies are purchased online in 2025
- Forecast for 2030: 90%
- Driven by OTA integration, mobile-first platforms, and insurtech growth
Digitalization is reshaping the market. Instant quotes, embedded offers, automated claims, and streamlined UX make online channels the clear default for American travelers.
Travel Insurance Claims in the US (2025)
Analyzing claim frequency and average amounts provides a clear picture of the primary risks faced by travelers from the US. This data is essential both for insurers in product design and pricing, and for consumers in understanding the real value of their coverage.
| Claim Type | Frequency | Avg Claim Amount |
|---|---|---|
| Trip Cancellation | 38% | $2,800 |
| Medical Expenses | 32% | $1,900 |
| Baggage Loss/Damage | 18% | $600 |
| Repatriation | 4% | $12,000 |
Trip cancellation is the most frequent claim type (38%), with a substantial average cost of $2,800 , reflecting the significant upfront investment US travelers make in flights, packages, and accommodations. Medical expenses follow closely (32%) at an average of $1,900 , underscoring the high cost of healthcare abroad. Baggage issues are common but lower in severity, while repatriation remains rare yet extremely costly, with an average claim of $12,000 .
Credit Card Insurance: Market Share & Claims
Credit card insurance plays a meaningful but secondary role in the US travel protection ecosystem. It coexists with standalone policies rather than replacing them.
| Type of Insurance | Share of Travel Insurance Claims |
|---|---|
| Credit Card Insurance | 22% |
| Standalone Policies | 78% |
Credit card insurance accounts for 22% of claims , closely aligned with its approximate market share. Standalone policies generate 78% of claims , reflecting their broader scope and higher limits. While card-linked coverage often acts as a convenient baseline, more complex or high-cost losses—such as major medical emergencies or expensive cancellations—are predominantly handled by dedicated policies.
Preferred Travel Insurance Types, Destinations, and Profiles in the US
The US travel insurance market is shaped by strong preferences for single-trip policies, long-haul destinations, and coverage tailored to families and seniors. This section explores the main coverage formats, the most insured destinations, and the traveler profiles that drive demand in 2025.
Types of Travel Insurance Coverage in the US
In the US, coverage structures reflect a focus on catastrophic risk protection, particularly for medical emergencies and trip disruptions. Policy limits and features are designed to reduce the financial impact of rare but costly incidents.
| Coverage Type | Typical Limits and Features (US, 2025) |
|---|---|
| Medical Coverage | $100,000 to $500,000; low deductibles ($0–$250) |
| Trip Cancellation | $10,000 to $20,000 per person (maximum reimbursement) |
| Baggage & Personal Effects | $1,000 to $2,500; exclusions for high-value items |
| Other Key Coverages | Liability: $100,000–$1M; assistance 24/7; flight delay benefits; teleconsultation in ~30% of plans |
High medical limits respond directly to the high cost of healthcare. Strong trip cancellation protection supports the large financial stakes involved in international travel. While baggage coverage amounts are more modest, they address frequent and tangible inconveniences. The growing presence of teleconsultation shows the shift from pure financial protection to integrated assistance services.
What Types of Travel Insurance Do Americans Prefer?
Travel insurance purchasing behavior in the US is shaped by high medical costs, expensive long-haul trips, and a strong preference for financial protection against major disruptions. The most popular formats reflect a need for flexibility and comprehensive coverage.
| Insurance Format | Market Share (US, 2025) |
|---|---|
| Single-Trip Policies | 60% |
| Credit Card Insurance | 22% |
| Annual Multi-Trip Plans | 18% |
Single-trip policies dominate with 60% , boosted by seamless point-of-sale integration during flight or hotel bookings. Credit card insurance remains a convenient fallback (22%), while annual plans (18%) appeal to frequent travelers seeking efficiency and predictable costs.
Who Buys Travel Insurance in the US? (By Traveler Profile)
Travel insurance demand in the US is heavily influenced by demographic groups with higher perceived risks or greater financial exposure. Families and seniors are the dominant insured segments in 2025.
| Traveler Profile | Share of Covered Travelers (US, 2025) |
|---|---|
| Families with children | 34% |
| Seniors (65+) | 28% |
| Frequent business travelers | 18% |
| Digital nomads | 6% |
Families with children (34%) prioritize protection for high-value annual vacations and peace of mind when traveling abroad. Seniors (28%) are particularly sensitive to health risks and often choose policies with strong medical and assistance features. Frequent business travelers (18%) rely on corporate or annual multi-trip plans, while digital nomads (6%) are driving demand for long-term, flexible, global cover.
Which Destinations Are Most Often Insured by US Travelers?
Destination choice significantly influences the likelihood of purchasing insurance. US travelers tend to insure more when traveling long distances, to regions with high medical costs, or where insurance is mandatory.
- Europe (Schengen Area): Popular destination with mandatory insurance for some visa applicants and high trip values
- United Kingdom: Frequently visited for tourism and business, with travelers seeking protection from cancellation and medical expenses
- Australia: Long-haul destination where high trip and healthcare costs make insurance essential
- Japan: High-value, long-distance trips where travelers look to protect both their investment and health
- United States (for inbound travelers): A top insured destination globally due to extremely high healthcare costs
These patterns highlight a sophisticated risk assessment process: the longer and more expensive the trip, and the higher the potential healthcare costs, the more likely Americans are to secure comprehensive protection.
How Much Do Travel Insurance Claims Cost in the US?
Average claim amounts illustrate the financial protection value travel insurance provides. The data shows that even routine claims often exceed the price of a policy, making insurance an essential precaution.
| Type of Claim | Average Amount (US, 2025) |
|---|---|
| Repatriation | $12,000 |
| Trip Cancellation | $2,800 |
| Medical Expenses | $1,900 |
| Baggage Loss/Damage | $600 |
Repatriation costs stand out at $12,000 , demonstrating the severe financial risk of emergency medical transport. Trip cancellations average $2,800 , reflecting substantial upfront investments. Even moderate medical claims reach $1,900 on average, while baggage claims at $600 cover frequent but lower-intensity incidents.
How Competitive Is the US Travel Insurance Market?
The US travel insurance market features a mix of global giants, specialized travel insurers, and innovative insurtechs. Despite clear leaders, the market remains moderately concentrated, ensuring both stability and competition.
| Rank | Insurer | Market Share | Notable Features |
|---|---|---|---|
| 1 | Travelex | 14% | Family-focused, well-rounded protection |
| 2 | Allianz | 13% | Strong for business travel, global network |
| 3 | AIG Travel Guard | 11% | Flexible plans with extensive add-ons |
| 4 | Nationwide | 8% | Broad and comprehensive coverage |
| 5 | Seven Corners | 7% | Strong medical protection, customizable plans |
- Market Structure: Moderately concentrated
- Number of Active Providers: 40+
- Top 5 Market Share: ~53%
- HHI Index: 1,000–1,200 (moderate concentration)
This landscape fosters innovation while maintaining consumer choice, supported by both large incumbents and agile challengers.
The Rise of Insurtechs in the US Travel Insurance Market
Insurtechs are transforming the US market with digital-first models, instant claims, flexible policies, and niche offerings for digital nomads or adventure travelers.
- Faye: Fully digital customer experience, instant reimbursements
- Battleface: Adventure-focused, flexible high-risk policies
- SafetyWing: Long-term, global coverage for digital nomads
Their innovations in digital UX, modular coverage, and automated claims are pushing traditional insurers to accelerate modernization and improve customer experience.
How Travel Insurance Is Priced in the US
Pricing methods are evolving from simple flat-rate structures toward more dynamic, data-driven models. This allows insurers to match premiums to individual traveler risk profiles.
- Flat-rate pricing: Still used for basic single-trip or some annual policies
- Dynamic pricing: Increasingly dominant; uses variables such as age, destination, duration, trip value, and coverage level
Dynamic pricing benefits both sides: insurers improve risk accuracy and profitability, while consumers receive more personalized and competitive rates aligned with their specific travel profiles.
How Travel Insurance Is Distributed in the United States
The primary distribution channel is embedded insurance—integrated directly into the purchase of flights, hotels, and travel packages.
- 55% of policies sold through OTAs, airlines, and tour operators
- Deep partnerships with major travel platforms such as Expedia and Booking.com
- API-driven integration powering seamless checkout offers
This channel is the main battleground for market share, providing insurers access to millions of travelers at the moment they are most aware of risk and most likely to purchase protection.
Comparison Platforms & API Integration
For consumers who prefer independent research, a robust comparison ecosystem supports transparent decision-making.
- Leading aggregators: Squaremouth , InsureMyTrip , TravelInsurance.com
- Widespread use of APIs for real-time quotes and policy integration across travel and fintech platforms
Comparison platforms have increased transparency and competitive pressure, while APIs enable insurers to distribute products across a wide range of digital touchpoints, from OTAs to financial super-apps.
Methodology of the 2025 Global Travel Insurance Barometer
The 2025 Global Travel Insurance Barometer is built on a robust, multi-source methodology designed to provide a reliable and comparable analysis of travel insurance markets worldwide. It combines quantitative data, qualitative insights, and forward-looking projections.
1. Geographic Scope
The study covers 35 countries , selected for market size, regional importance, maturity level, and data availability.
- Argentina, Australia, Austria, Belgium, Brazil, Canada
- China, Czech Republic, Finland, France, Germany
- Hong Kong, India, Indonesia, Ireland, Italy, Japan
- Luxembourg, Malaysia, Mexico, Morocco, Netherlands
- New Zealand, Philippines, Portugal, Singapore, South Africa
- South Korea, Spain, Sweden, Switzerland, Thailand
- United Arab Emirates, United Kingdom, United States
2. Timeframe
The primary reference year is 2025 . Historical trends from 2015 to 2025 are used to contextualize market evolution, and forecasts extend to 2030 . When the latest available data is from 2023 or 2024, these figures are used as the basis for 2025 estimates through statistical modeling.
3. Sources Used
The barometer relies on a multi-source strategy prioritizing official, public, and cross-validated datasets. Estimations are used only where direct data is unavailable and are clearly identified as such.
- National and international statistical agencies: OECD, World Bank, UNWTO, WHO
- Insurance regulators and industry associations: UStiA, NAIC, Insurance Europe, ABI, GDV, ANIA, UNESPA, CLHIA, SAIA, and others
- Market research and consulting: IBISWorld, Finaccord, Mordor Intelligence, Grand View Research
- Public financial disclosures: annual reports and investor presentations from insurers and reinsurers
- Digital platforms and insurtechs: OTAs, comparison sites like Squaremouth, and players such as Cover Genius
- Consumer surveys and reputable media: financial press and industry publications
4. Data Modeling & Estimations
To ensure cross-country comparability, data is standardized and harmonized. When direct indicators (e.g., claim frequencies or market shares) are missing, estimates are built using regional averages, analogous market structures, and known penetration rates. Currency values are converted using IMF reference exchange rates for 2025, and projections to 2030 apply Compound Annual Growth Rate (CAGR) assumptions based on historical growth and analyst consensus.
5. Scope of Indicators
The barometer covers both supply-side indicators (market structure, key players, product design, technological innovation, distribution channels) and demand-side indicators (penetration rates, claim patterns, digital adoption, consumer behavior). This dual approach enables cross-country comparison while capturing each market's legal, cultural, and economic specificities.
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