Pet insurance is no longer a niche product. It is still far from a common one, and it is becoming more expensive faster than most household costs.
The headline numbers
The North American Pet Health Insurance Association released its 2026 State of the Industry report on June 21. It covers 2025 (NAPHIA):
- U.S. premium volume: about $5.7 billion, up 19.7% from 2024.
- Insured pets in the U.S.: up 9.0% in a year, and up roughly 76% over five years.
- Share of pets insured: 4.27% of U.S. dogs and cats, or 5.99% of dogs and 2.29% of cats. With about 163.6 million dogs and cats in U.S. homes, that is roughly 7 million insured pets.
The report notes that premium volume is growing faster than the number of insured pets because average premiums keep rising year after year.
What coverage costs now
Average annual U.S. premiums by policy type, 2024 versus 2025 (NAPHIA 2026; NAPHIA 2025):
| Policy type | Dogs 2024 | Dogs 2025 | Cats 2024 | Cats 2025 |
|---|---|---|---|---|
| Accident-only | $193 | $190 (−1.6%) | $110 | $112 (+1.4%) |
| Accident-and-illness | $749 | $836 (+11.5%) | $386 | $435 (+12.6%) |
| Insurance with embedded wellness | $1,321 | $1,414 (+7.0%) | $651 | $859 (+31.9%) |
Two conclusions follow:
- Accident-only prices held steady. The cost increase is concentrated in illness coverage, which is where the large claims are.
- Wellness bundles cost the most and rose the most for cats. Before you pay for an embedded wellness benefit, price the routine care it covers at your own vet.
What owners actually claim for
According to the report, the most common claims in 2025 were gastrointestinal problems for both species. For dogs, ear infections and skin conditions followed. For cats, dental disease and urinary tract infections came next.
These are ordinary conditions, not catastrophes. They are frequent, and over a pet's life their cost adds up. The largest single dog claim the report lists paid $66,600, for a chronic illness in a three-year-old Bernese mountain dog. Large claims can hit young pets too.
What the policy actually says
Rising averages do not tell you what your own renewal will cost. Check these lines.
- Renewal terms. Ask how your premium is expected to change as your pet ages, and whether the insurer can raise rates for your whole plan.
- Deductible and reimbursement rate. A higher deductible or a lower reimbursement percentage can offset an increase, at the cost of paying more per claim.
- Waiting periods do not restart at renewal. Under the NAIC model law, waiting periods may not be applied to renewals, and a condition covered on your policy cannot be treated as pre-existing when you renew ( NAIC ). Switching insurers, however, can mean new waiting periods and new pre-existing exclusions.
Coverage check
The bottom line: more owners are buying pet insurance, and they are paying more for it each year. If you have a policy with a long claims history, think carefully before switching. If you are deciding whether to buy, accident-and-illness coverage is where both the cost and the protection are rising.
Sources
- North American Pet Health Insurance Association, State of the Industry Report 2026, highlights , June 21, 2026 (industry-funded; figures for 2025)
- North American Pet Health Insurance Association, State of the Industry 2025 , April 22, 2025 (industry-funded; figures for 2024)
- National Association of Insurance Commissioners, Pet Insurance Model Act (#633)
Insurance rules and prices vary by state and insurer. This article is for general information, not individual advice; consult a licensed insurance professional for your situation.