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Pets are as important a part of families as people, in many cases. This means when they get ill, it can be difficult and even traumatic for owners. It can also be expensive. But pet insurance aims to take the financial worry out of vet bills. Depending on the type of policy and level of coverage, a policy can protect against everything from accidents and injuries to illnesses and ongoing treatment requirements.
It is similar to health insurance for people, although there are more restrictions and exemptions, especially in the case of some hereditary illnesses and pre-existing conditions. Like health insurance, pet insurance requires that you pay a monthly premium to the insurance company. In exchange, if your pet has to visit the vet or needs any treatment that is covered by the policy, the insurer will either reimburse you or pay the vet directly.
Despite its benefits, many owners see it as a waste of money if their pet rarely gets ill, and, as such, only just over 5 million of the country’s over 111 million pet cats and dogs are insured.
Read on for more facts and statistics related to the pet insurance industry.
The 16 Pet Insurance Facts
- Two-thirds of U.S. households own pets.
- There are approximately 111.6 million pet cats and dogs in the U.S.
- Pet owners spent a combined $143.6 billion on their pets in the past year.
- The global pet insurance market is worth more than $9 billion annually.
- The U.S. pet insurance market has a total premium value of more than $3 billion.
- $1.92 billion in claims were paid in 2022.
- Over 5 million U.S. pets are insured.
- 80% of insured pets are dogs.
- Pet insurance for dogs costs $53.34 per month for adults.
- Pet insurance for cats costs $32.25 per month for adults.
- More than 40% of pet owners wouldn’t be able to cover an emergency vet bill.
- 33% of uninsured pet owners have avoided visiting the vet because of the potential costs.
- A quarter of pet owners have refused veterinary treatment due to costs.
- 40% of pet owners would use credit cards to pay for unexpected vet bills.
- Gen Z is the most likely generation to have pet insurance.
- A lack of knowledge is the most common reason people avoid pet insurance.
Pet Ownership Statistics
1. Two-thirds of U.S. households own pets.
(APPA)
The U.S. loves its pets! According to the APPA National Pet Owners Survey for 2023–2024, around two-thirds of all households in the country own at least one pet. This figure includes dogs and cats, which are the two most popular species of pets, but also includes other animals like fish, birds, and even horses. And while many homes only own one pet, many own two or more, including different species.
2. There are approximately 111.6 million pet cats and dogs in the U.S.
(APPA).
Dogs and cats are the most popular pet species. They offer interaction and will form close bonds with their owners, whereas species like fish and some birds are generally kept for their beauty rather than their interactivity. In total, there are over 111.6 million pet cats and dogs in the U.S.
3. Pet owners spent a combined $143.6 billion on their pets in the past year.
(APPA)
The pet industry is massive, and in the U.S. alone, owners spent a combined total of $143.6 billion on their animals in 2023. Although the biggest spend came in pet food and treats, accounting for $62.7 billion of this money, vet expenditure came in second with expenditure amounting to $37 billion. Over-the-counter medication was the third highest spend and cost owners $32.1 billion in the 12 months.
Pet insurance does cover prescription medications, and some policies will also include expenditures on items like prescription foods. It doesn’t typically cover flea and other preventative medication, however.
The Pet Insurance Industry
4. The global pet insurance market is worth more than $9 billion annually.
(Grand View Research)
Pet insurance is increasing in popularity, with the total global industry now worth an estimated $9 billion annually. Continued growth in the pet population, as well as factors like greater market penetration in undeveloped markets, mean that this figure is expected to grow by an incredible 17.04% per annum between now and 2030.
(NAPHIA 1)
The U.S. market saw $3.5 billion in total premium volume in 2023, paid on policies for a total of over 5 million pets. This is significantly higher than in a lot of countries. For example, Canada saw just over half a million pets insured and had a $374 million total premium volume during the same period. The figures represent a 23.5% increase in gross-written premiums.
6. $1.92 billion in claims were paid in 2022.
(Global Pet Industry)
Also, in 2022, $1.92 billion in claims were paid out to U.S. pet owners in the 12-month period. This means that insured pet owners paid out more than $1.3 billion more than they claimed in the year. Canada saw $155 million of premiums paid out in the year.
7. Over 5 million U.S. pets are insured.
(NAPHIA 1)
Pet insurance can protect against unforeseen expenses, negating the need for owners to pay for veterinary care and treatment out of their pocket. For a lot of owners, it is the only way they can afford the high vet bills associated with certain conditions. Despite this, only 5.36 million of the country’s nearly 200 million cats and dogs are thought to be currently insured.
8. 80% of insured pets are dogs
(Forbes 1)
Out of those 5.36 million insured pets, 80.1% of them are dogs. This is despite the fact that insurance for dogs carries higher premiums and is likely because dog vet bills tend to be higher than cat vet bills. Although it is possible to get insurance for other types of pets, options are severely restricted.
Exotic pet and bird insurance policies are available. So, too, is horse insurance. But it is very difficult to find policies for smaller animals.
Pet Insurance Costs
9. Pet insurance for dogs costs $53.34 per month for adult dogs.
(NAPHIA 2)
Pet insurance can cover unexpected vet bills and associated costs, but one of the factors that puts a lot of owners off is the cost of monthly premiums. The latest report showed that in 2022, on average, it costs $53.34 per month.
Most companies have a maximum age policy for new policies but will continue to insure a dog throughout its life as long as an existing policy is in place.
10. Pet insurance for cats costs $32.25 per month for adults.
(NAPHIA 2)
The same report done by NAPHIA in 2022 showed that the average monthly premium for adult cats is $32.25 per month. It is common to see a difference between insuring a dog versus insuring a cat.
Pet Insurance Opinions
11. More than 40% of pet owners wouldn’t be able to cover an emergency vet bill.
(Forbes 2)
Pet insurance policies vary according to the level and amount of coverage they offer. Accident-only policies cover pets if they are involved in accidents and need emergency treatment. Unexpected illness policies, which typically also include accident coverage, pay the vet bills for unexpected illnesses. Costs of veterinary treatment can also range from $50 for routine visits to thousands of dollars for tests, diagnosis, treatment, and ongoing care.
More than 4 in 10 owners say they wouldn’t be able to cover the cost if they were faced with an emergency vet bill.
12. 33% of uninsured pet owners have avoided visiting the vet because of the potential costs.
(Marketwatch 2)
While insurance can seem expensive when paying a monthly premium and a pet doesn’t need medical attention, it does offer peace of mind so that owners can ensure their pets get the best possible treatment when required. A third of uninsured owners say they have avoided visiting the vet when their pet is ill because they are worried about the potential cost.
13. A quarter of pet owners have refused veterinary treatment due to costs.
(Pawlicy)
Of those uninsured owners who have visited the vet with their pets, a quarter have refused treatment because they have been unable to afford the costs. A lot of these costs would have been covered by suitable pet insurance policies.
14. 40% of pet owners would use credit cards to pay for unexpected vet bills.
(Marketwatch 3)
In one survey, only 12.9% of respondents said they would use a pet insurance policy to cover the cost of any unexpected vet bills. The most common method of paying for these unexpected costs was a credit card, with around 40% of respondents saying they would use this method. 32.2% would use cash or their savings, and 3.5% would take out a personal loan. 9.2% did not know how they would meet the payments.
15. Gen Z is the most likely generation to have pet insurance.
(Pawlicy)
Pet insurance was introduced in the 1970s, and it is widely claimed that TV dog Lassie was the first pet to be insured. Since then, the financial product has increased in popularity, although by no means has it reached every corner of the pet-owning population. When it comes to the age groups most likely to insure their pets, it is Generation Z that leads the way.
More than half of 18–24-year-olds claim to have pet insurance policies, compared to just 13% of those aged over 54.
16. A lack of knowledge is the most common reason people avoid pet insurance.
(Marketwatch 3)
There are many reasons why owners choose not to insure their pets. The most common reason given by more than a third of uninsured pet owners is that they feel they don’t know enough about pet insurance to buy it. This compares to 28% who said that they believe it is too expensive. 16% said they do not have pet insurance because their pet is healthy.
10% said they have savings to cover vet bills, and 6.5% believe pet insurance to be a scam.
Frequently Asked Questions About Pet Insurance (FAQ)
Do you legally have to insure a cat or dog?
Pet insurance is not a legal requirement. It is up to every owner whether they want a pet insurance policy. It is worth noting, however, that most insurance policies have exemptions that can come into force. For example, most policies do not cover pre-existing conditions. So, while it might seem a waste of money to get insurance for a healthy dog, doing so means your pup is protected against more incidents.
Similarly, most insurers have a maximum age policy. If your pup has a policy before it reaches this age, it will continue as long as you pay the premiums. So, it is better to get a policy when your dog is still young if you intend to get one at all.
Does pet insurance cover existing conditions?
Although it depends on individual policies, pre-existing conditions are not usually covered by insurance. Insurance policies are meant to protect against unexpected illnesses and accidental injuries. However, some policies will protect pets if they have been symptom-free for 12 or 24 months. Always check the policy and ask the insurer to be sure.
Does pet insurance cover preventative treatments?
Depending on the policy type, pet insurance covers accidents and unexpected illnesses. It doesn’t generally cover any preventative treatment. However, some policies do offer incentives, such as free flea treatment for puppies. And some insurers offer add-on wellness policies. These cost money but save a small amount on the cost of flea and other preventative treatments.
Does pet insurance get more expensive if you claim?
When your policy is renewed at the end of its term, the insurer will likely increase the premium if you have made any claims against the policy. This is especially true if your pet is likely to need ongoing and additional treatment that would be covered under the policy terms.
Can you get pet insurance for small animals?
Pet insurance is most commonly offered to cat and dog owners, but it is possible to get insurance for other types of pets. Exotic pets, including lizards and snakes, can be insured under exotic pet insurance policies. Horse insurance certainly exists and can cover injury to the owner as well as damage to vehicles or property.
If you shop around and ask some of the more specialized insurers, you might be able to find policies for birds and even for small animals like ferrets and guinea pigs. However, these policies are rare, and you won’t have the kind of choice that a cat or dog owner would have when shopping for insurance.
Conclusion
Pet insurance can cover some of the unexpected costs associated with owning cats and dogs, and it is even possible to insure some other pet animal species, but the vast majority of pet owners still do not have pet insurance. Experts expect market penetration to continue to climb in the coming years, which, combined with the increased pet population size, will also see the pet insurance industry continue to grow.
Also see:
- How to Save Money on Vet Bills: Genius Tips & What to Avoid
- Average Cost of a Vet Visit for Cats: How Much Should I Expect to Pay?
Featured Image Credit: visivastudio, Shutterstock
