Pet insurance boom gives owners more room for other pet spending

More than 6.4 million pets in the United States were insured in 2024, a 12.7% jump from 5,681,774 in 2023, as pet insurance kept moving from niche product toward mainstream household expense. North American Pet Health Insurance Association data show the market more than doubled in gross written premium from about $2 billion in 2020 to $4.74 billion in 2024, a pace that underscores how quickly owners have embraced coverage for their animals.

Dogs still dominated the insured pool, making up 75.6% of covered pets, while cats accounted for 23.5%. Even so, pet insurance remained far from universal. One trade-industry estimate put U.S. penetration at about 3.9% of dogs and cats combined, which means most households still pay veterinary bills out of pocket and most pets remain uninsured.

That gap matters because the selling point of pet insurance is not just lower vet bills, but more flexibility elsewhere in the pet budget. For owners facing an emergency surgery, a sudden diagnosis or a broken leg, reimbursement can preserve cash that might otherwise be reserved for the clinic and redirect it toward grooming, training, enrichment, premium food, boarding or elective care. The catch is that insurance does not erase the cost of pet ownership. Consumer-facing insurance sources note that policies include exclusions, coverage limits and reimbursement rules, so the plan may soften a large bill without covering every expense.

The American Veterinary Medical Association said U.S. pet insurance gross written premium reached a record $4.7 billion in 2024, up 21.4% from $3.9 billion in 2023, reflecting continued expansion even as growth slowed from the post-pandemic surge. The Insurance Information Institute has said the average accident-and-illness premium for dogs was $676 a year, or $56 a month, a fixed cost that only pays off if a claim is large enough and frequent enough to outweigh the premium itself.

Rising pet costs are part of the backdrop. One 2026 report put average annual spending at about $2,360 per pet in 2025, adding pressure to already stretched household budgets. In that setting, pet insurance functions less like a luxury than a cash-flow tool, best suited to owners who can afford the premium, absorb exclusions and wait for reimbursement when a claim is approved.