Travel Insurance Outlook 2025: It’s All About You

Travel insurance companies hope to smooth out any turbulence you may encounter on your trips in 2025 by rolling out more consumer-friendly benefits. Among them are pet-inclusive policies, enhanced multitrip policies and automatic claim payouts. These extras may help take the sting out of rising trip costs, which are expected to continue climbing.

We spoke with travel insurance experts about top trends shaping the industry in 2025. If you’re planning a trip, these key trends could change how you choose and use travel insurance.

Increased Focus on Technology and Personalization

Expect travel insurance companies to leverage technology for faster, more personalized services in 2025.

“Enhanced technology, including AI-powered chatbots and mobile apps, will continue to streamline the claims process and provide real-time assistance,” predicts Jason Block, CEO of WorldVia Travel Group.

Technological advancement is likely to speed up claims processing and payouts.

“I believe you’ll also continue to see increased utilization of services that instantly pay out without an insured having to go through a claim reimbursement process. These will likely center around medical issues, flight and baggage delays,” says Jason Schreier, CEO of travel and event insurance of Aegis General Insurance.

These instant-pay services are called “parametrics” and they differ from the traditional travel insurance claims process. With parametrics, when you experience a problem covered by your policy, you get an instant payout at a set amount, rather than submitting a claim with documentation and waiting to be reimbursed.

What Does This Mean for You?

Look for travel insurance companies to offer user-friendly mobile apps, AI-assisted customer service and instant payout options for certain types of claims. These features can make it easier to file claims and get real-time assistance when traveling.

Pet-Inclusive Travel Insurance

Expect to see more people traveling with pets in 2025.

“One of the biggest trends we’re seeing is travelers bringing their pets along. Specifically, luxury travel with pets keeps on getting more popular,” says Lauren Gumport, vice president of communications and brand at Faye, a travel insurance company.

This trend is spurring more travel insurance companies to provide benefits for kenneling fees if your return home is delayed and benefits for pets traveling with you.

What Does This Mean for You?

Pet owners who plan to take their pets on trips can look for policies that reimburse medical expenses for illness or injury of a dog or cat traveling with you. Some policies cover trip cancellation and trip interruption if your pet is in critical condition or dies within seven days before your departure.

Shift Toward Multitrip Insurance Policies

Another insurance trend: Multitrip plans, also called annual travel insurance policies, are gaining popularity as travel patterns evolve. A multitrip travel insurance policy covers multiple trips for a year from the policy’s effective date.

“I think you’ll continue to see an increase in annual travel insurance sales versus the traditional single trip plans,” says Schreier.

These policies used to be limited, but now they’re becoming more comprehensive. “Historically, annual plans didn’t include popular benefits like trip cancellation. However, you’re now seeing that coverage included more commonly,” Schreier says.

The appeal of annual plans extends beyond frequent travelers. “The trend of working remotely—including ‘workations’ where travelers extend vacations to work from their destination—has also fueled increased demand for longer-term travel options,” says Block.

What Does This Mean for You?

Do the math and see if an annual travel insurance plan makes more sense than buying multiple single-trip policies.

“If you travel three or more times a year, you may save money by going annual,” says Schreier. “This also removes the homework of remembering to re-enroll before every trip.”

Expansion of Adventure and Luxury Travel

Another notable trend for 2025 is the growing demand for luxury travel and adventure trips incorporating thrill-seeking activities such as hang gliding.

Adventure-based trips are expected to remain popular in 2025, and simultaneously the luxury travel sector is booming. Schreier observes that people are spending more than ever on vacations that cross off items on their bucket lists.

“Many travel insurance underwriters are hesitant to insure costly vacations above $25,000 or $50,000 per person. However, I think you’ll see the insurance market opening up to meet that demand,” he says.

What Does This Mean for You?

Pay close attention to policy limits and exclusions if you’re planning an adventure trip in 2025. Most travel insurance policies don’t cover extreme sporting activities, but you can find policies that offer upgrades that will cover adventure pursuits. Adventure travelers may also want to choose a plan with higher coverage limits for medical emergencies and evacuation. Also, make sure your specific activities will be covered.

Luxury travelers may want to buy policies with higher limits across the board. If you’re packing lots of valuable items and planning to visit multiple destinations, you can travel knowing you have sufficient coverage for the unexpected.

Cruise Revival

Cruise travel has experienced a significant boom since the pandemic, with demand for some trips reaching an all-time high. Passenger volume for cruises increased by 19% from 2019 to 2023, according to the 2024 State of the Cruise Industry Report by the Cruise Lines International Association (CLIA).

“Improved Wi-Fi now makes back-to-back cruising while working possible, which wasn’t feasible a few years ago,” says Block.

Some experts say travelers are beginning to view cruises as a more economical way to travel.

“With the rising cost of living and the increase in trip expenses, travelers are looking for economical ways to enjoy luxurious vacations, and cruising in many cases can offer better value than a land-based trip,” says Angela Borden, spokesperson at Seven Corners, a travel insurance company.

What Does This Mean for You?

Borden says it’s important to look for specialized cruise travel insurance.

“If your flight is delayed long enough to cause you to miss your ship’s departure, you can’t just hop on the next ship to catch up with yours. That’s why specialized cruise plans include missed cruise connection, a benefit that covers additional transportation costs to rejoin your cruise ship if you’re delayed the required number of hours due to a covered reason,” she says.

Rising Trip Costs Mean Higher Travel Insurance Costs

The cost of travel is expected to keep climbing in 2025, driving up travel insurance prices. “Trip costs in 2025 are likely to continue rising due to factors such as inflation, increased demand and potential fuel price fluctuations,” predicts Block.

“The ongoing global inflationary environment has pushed up prices for accommodations, flights, food and activities. Combined with strong demand, prices are expected to rise further,” he says.

What Does This Mean for You?

The amount of prepaid, non-refundable trip costs you have significantly impacts how much you pay for travel insurance. The more you spend on your trip (and insure the trip for), the higher the potential claim payout is for the travel insurance company.

The average cost of travel insurance is 4% to 6% of your trip costs, according to Forbes Advisor’s analysis of travel insurance rates. Buying travel insurance can be prudent if you want to protect the hard-earned money you’re investing in a trip.

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Travel Destination Trends in 2025

Based on our analysis of travel insurance sales data, Mexico, Italy, the Bahamas, the U.K., and Spain are the top international travel destinations for Americans in 2025.

How to Find the Right Travel Insurance in 2025

Here are some tips for choosing the best travel insurance company and coverage in 2025:

• Determine the coverage you need. Decide what benefits are important to you, and look for policies that match your needs. For example, if you’re traveling abroad, you’ll likely want a policy with generous travel medical insurance since your U.S.-based health insurance may have no or limited coverage in other countries.
• Look for upgrades and specialty coverage. Think about the particulars of your trip and research policies that provide coverage for your situation. For example, if you’re traveling with a pet or renting a vacation home, look for policies with pet-related benefits. If you want the broadest coverage for cancellation, look for policies offering “cancel for any reason” travel insurance. It’s an optional upgrade that typically reimburses 75% of insured trip costs when your reason for cancellation is not listed in the basic trip cancellation reasons.
• Estimate your non-refundable trip cost. Any prepaid, non-refundable expenses can be insured by trip cancellation insurance, such as airfare, lodging, event tickets, excursions and theme park passes and tours. If you’re unsure of what your non-refundable trip cost will be, estimate the amount and then update it later with the travel insurance company, as long as it’s before your departure date.
• Get quotes online or through a travel insurance agent. To get a quote, you typically need the travelers’ ages (or dates of birth), destination, travel dates and the trip cost being insured. You’ll usually be presented with a selection of policies at different price points, with the more expensive ones providing higher coverage levels. Compare the coverage amounts and once you select a policy, you can buy it online.
• Review the policy. You usually have two weeks or so to review the policy. If you change your mind, you can get a refund, as long as it’s during the specified review period. This is a good time to read the fine print so you’re familiar with what travel insurance covers.