Pet insurance trends, key developments, and updates you need to know

Photo courtesy Pet’s Best

Pet insurance is a rapidly growing industry, with more than 5.36 million insured in the North American market, representing a 21.7 percent average annual growth rate.1 With streamlined digital platform service, the ability to offset rising veterinary costs and the appealing presentation of a workplace benefit, the value of pet insurance shows no signs of slowing down.

Pet insurance helps pet parents afford the best course of treatment, protects against major financial setbacks, and helps provide peace of mind by reimbursing eligible veterinary bills. With the progressive advancement of technology, the equipment being used in the practice is now human-grade, giving pets the best chance at a long and healthy life. However, we know this advancement often comes with an unsightly, high price tag.

Rising costs are a common obstacle to pet parents. In just a year, veterinary costs have increased nearly 11 percent.2 An accidental broken bone can average an unexpected $2,700, and a routine spay can cost up to $556. In our own survey of stressors, we found just a $250 invoice is enough to cause substantial stress in clients.3

However, not all pet parents are created equal. Younger generations experience the greatest weight of this anxiety; the Pet Parenthood Today study found 87 percent of Gen Z pet parents and 85 percent of millennial pet parents experience significant anxiety related to pet care costs. In turn, these generations are more open to insurance as a solution to finance pet healthcare costs compared to older generations.

In fact, according to the North American Pet Health Insurance Association’s (NAPHIA) 2023 State of the Industry report, despite rising economic pressure, demand for pet insurance continues to increase. Dog owners hold a major share of this demand, with 80.1 percent of all insured pets in the United States listed as canines. However, cats’ market share continues to demonstrate an upward trajectory.

The report also offers a breakdown of the most common claims differences between cats and dogs. The most common claims for dogs include skin conditions, gastroenteritis, ear infections, and UTIs, whereas cats follow similarly with gastrointestinal issues and UTIs, but also experience frequent upper respiratory infections. For insurance covering accidents and illnesses, cats lie at an average annual premium cost of $387.01 and dogs lie at $640.04.

To promote easy access to this information, pet insurance is continuing with the trend of digital accessibility. Pet parents are looking for instantaneous access to the information and resources that matter most, such as in a mobile app.

A mobile app provides the ability to submit claims before leaving the vet’s office, which could be a major anxiety reliever to pet parents. Mobile users can also quickly and securely access benefit information, add new pets to their account, store their pet’s medical records and manage payment preferences.

A mobile app could also provide access to a 24/7 hotline to talk with veterinary professionals. Quick, responsive feedback is vital, as pet parents are spending an average of 8.5-9.5 hours per day with their pet.3 Pet parents agree having pet health insurance helps to ensure peace of mind, which has a positive impact on how they spend time with and care for their pets.3 On-demand resources helps increase this comfort and ability to best engage with our pets on a daily-basis.

With these obvious offsets of rising costs and prominent efforts towards digital accessibility, pet insurance is beginning to be held in high regard. Employers need notice this shift when considering employee benefits. Pet-friendly workplaces continue to rise in demand, with 57 percent of pet parents “preferring to work for an employer who values pet ownership.”3 This can look like anything from offering pet insurance benefits to allotting paid-time-off for “pawternity” leave. Twenty-three percent of survey respondents admitted that their pets affect their employment decisions, so these pet-friendly benefits can bring in a desired influx of hiring and retention.3

Though these stats demonstrate overall industry growth, some geographical locations stand out. According to the NAPHIA 2023 State of the Industry Report, California holds the majority of insured pets at 18.6 percent, followed by New York, Florida, Texas, New Jersey, Pennsylvania, Massachusetts, Washington, Colorado, and Illinois.2 This tracks closely to state population numbers, with recent statistics showing California as the most populated U.S. state in 2022, followed by Texas, Florida, and New York.

Location aside, now is the optimal time for veterinarians to encourage uninsured pet owners to look into their pet insurance options. Pet owners with pet health insurance say they are “more likely to go to the vet” than those without pet health insurance.3 This reduces the chance of veterinarians having to guide pet parents through difficult decisions.

The Access to Veterinary Care Coalition (AVCC) conducted a study to better understand the barriers pet parents face when seeking veterinary care and found that the overwhelming barrier to all types of pet healthcare is financial.4 The study also found most veterinarians feel a responsibility to provide some level of care to all animals and feel emotional pain and guilt when having to turn down medical care due to insufficient funds.

So, what do we need to know about pet health insurance moving forward? The most important takeaway is the ability of pet health insurance to not only fortify financial wellness, but the wellness and care of our pets.

Pet health insurance will continue to shift towards accessibility with younger generations, whether that be digitally or financially. We foresee the social response adding emphasis to offsetting costs by including pet health insurance as a workplace benefit. This way, veterinarians are able to provide the necessary level of care without cost-related guilt, and pet parents are able to get back to what matters most: their furry best friends.

Melissa Gutierrez serves as the CEO of Pets Best. Gutierrez brings with her a diverse mix of insurance industry experience, having held roles across sales & distribution, strategy, product, finance, and marketing verticals in insurance businesses, including property casualty, life, health, and financial services. Most recently, Gutierrez served as president of NBS Insurance Agency, Inc., a property casualty insurance brokerage owned by Nationwide.


  1. NAPHIA. (2023, May 3). State of the Industry Report 2023 Highlights.
  2. Kilroy, A. (2023, August 30). Veterinarian costs are rising: Pet insurance may be the answer. Forbes.
  3. Pets Best. (2022, December 14). A new pet parenthood study by Pets Best Looks at the experience of being a pet parent.
  4. Access to Veterinary Care Coalition. (2018, December 17). Access to Veterinary Care Coalition. Program for Pet Health Equity.