Pet Insurance Is Growing Fast but Still Covers Fewer Than 1 in 20 U.S. Pets

Pet insurance in the U.S. now covers about 3.9% of dogs and cats combined, with dog penetration at 5.46% and cat penetration at 2.04%, per NAPHIA’s 2025 State of the Industry report. The market more than doubled from roughly $2 billion in gross written premium and about 3.1 million insured pets in 2020 to $4.74 billion and 6,405,541 insured pets at year-end 2024, yet more than 96% of America’s pets still have no coverage.

NAPHIA's State of the Industry 2025 report, compiled by WTW and covering an estimated 99% of written pet health insurance premium in North America, puts U.S. insured pets at 6,405,541 at year-end 2024. MoneyGeek divided that count by the total U.S. dog and cat population of roughly 163.5 to 163.6 million, drawn from APPA and AVMA estimates, to arrive at the 3.9% penetration rate. Table 1 shows the full year-by-year series from 2020 to 2024.

Gross written premium grew at an average annual rate above 20% from 2020 to 2024. But premium growth has outpaced pet count growth for each of the last two years, meaning average premiums per pet are rising. Average accident-and-illness premiums reached $749 for dogs and $386 for cats in 2024, up 10.8% for dogs and 0.9% for cats from 2023, per NAPHIA.

By international standards, the U.S. pet insurance market remains lightly penetrated after four years of rapid growth. NAPHIA’s State of the Industry report and national-market data show that U.S. combined penetration sits at 3.9%, compared with dog-only penetration of about 5.57% in Canada, roughly 25% to 33% overall penetration in the U.K., and dog penetration near 90% in Sweden. Canada’s and Sweden’s figures come from NAPHIA’s international comparisons; the U.K. figure reflects national insurer association data cited in NAPHIA’s published notes.

The core driver is straightforward: veterinary services have gotten expensive fast. The Bureau of Labor Statistics Consumer Price Index for veterinary services rose 7.6% to 7.9% annually in 2023 and 2024, well above general CPI. U.S. insurers paid $3.07 billion in claims in 2024, up 23.6% from 2023, per NAPHIA’s State of the Industry 2025 report. Individual emergency claims reached $20,000 to $60,000, according to NAPHIA case data.

The pace of policy growth has moderated even as premiums keep climbing. Insured pet counts grew 12.7% in 2024, down from 28.3% in 2021, per NAPHIA. And 86% of the market is accident-and-illness coverage, the most comprehensive plan type. That means the average policyholder is buying more protection, not less, even at higher prices.

Pet ownership itself has also grown. APPA’s 2024–2025 National Pet Owners Survey found that 71% of U.S. households, or about 94 million families, own at least one pet. More owners means a larger pool of potential policyholders, even at a low penetration rate.

Pre-existing condition exclusions are standard across the industry. The NAIC Pet Insurance Model Act, which states are beginning to adopt, requires insurers to disclose this clearly, but the exclusion itself remains industry practice. Pets enrolled later in life have more documented health history, which limits what a new policy will cover.

Policy design adds complexity. Pet insurance operates on a reimbursement model: owners pay the vet bill at the time of service, then file a claim. Reimbursement levels, annual limits and per-incident or per-year deductibles all vary by plan. The NAIC’s consumer guide to pet insurance lists these variables as common sources of confusion for buyers.

Vet cost inflation also pushes insurers to exit markets rather than expand them. In May 2024, Nationwide announced it would not renew approximately 100,000 pet insurance policies, citing rising veterinary costs as a threat to the financial sustainability of its pet insurance line, per CBS News.

Cost perception also keeps many pet owners out of the market. NAPHIA’s 2025 data puts the average annual accident-and-illness premium at $749 for dogs and $386 for cats, or roughly $62 for dogs and $32 per month for cats. Those figures are lower than most owners expect to pay, according to survey research cited by the American Animal Hospital Association in December 2024, though the gap varies by survey methodology. Affordable plan options exist across most states. The distance between perceived and actual cost is a structural barrier that the industry has not fully closed.

Gen Z has the highest pet insurance adoption rate among all generations. A 2023 Statista survey of U.S. pet owners found that 42% of Gen Z pet owners carried insurance, compared with 31% of millennials. Dog owners account for 75.6% of all insured pets and cat owners account for 23.5%, per NAPHIA’s 2025 data.

Geographically, California accounts for 18.3% of all insured U.S. pets, followed by New York at 7.2%, Florida at 6.3% and Texas at 5.5%, per NAPHIA’s State of the Industry report. Employer-sponsored coverage is a growing distribution channel: Mercer’s 2022 National Survey of Employer-Sponsored Health Plans found that 36% of large employers (those with 500 or more workers) offered pet insurance as a voluntary benefit, up from 15% five years earlier, per HR Dive.

MoneyGeek analyzed NAPHIA’s State of the Industry 2025 report, compiled by WTW and covering an estimated 99% of written pet health insurance premium in North America. NAPHIA’s headline figure of $5.2 billion in gross written premium covers all of North America. The U.S.-only figure, $4.74 billion, reflects approximately 91% of that total, consistent with the U.S. share of North American insured pets reported by NAPHIA. All premium and penetration figures in this article are U.S.-only unless otherwise noted. NAPHIA reports 6,405,541 U.S. insured pets at year-end 2024. For the penetration rate, MoneyGeek divided insured-pet counts by the total U.S. dog and cat population of roughly 163.5 to 163.6 million, drawn from the APPA 2024–2025 National Pet Owners Survey and AVMA U.S. pet ownership statistics. Where NAPHIA published a penetration figure directly, MoneyGeek used that figure and confirmed the implied calculation matched within rounding tolerances.

Year-over-year growth rates were calculated from NAPHIA’s premium and insured-pet series using standard arithmetic, then verified against NAPHIA’s published growth percentages. Historical figures for 2020 to 2023 are drawn from prior NAPHIA annual highlights and are approximate. The 2024 figures are from the NAPHIA SOI 2025 release. Market-size projections from third-party forecasters are treated as scenario ranges, not base-case assumptions. MoneyGeek didn't project penetration beyond the last year with primary data.