Pet insurance is getting pricier

A few years ago, pet insurance was easy to pitch. Pay a monthly premium, brace for the occasional stomach obstruction or torn ligament, and let the policy catch the worst of the bill. This spring, Steve Dale, the longtime pet broadcaster and columnist, argued that the math is changing. Premiums are climbing fast enough that insurance is no longer the obvious safety net it once seemed, especially for owners already squeezed by the broader cost of keeping a dog or cat healthy. (stevedalepetworld.com 1) (stevedalepetworld.com 2) The industry’s own numbers show the turn. In the United States, the average 2024 accident-and-illness policy cost $749.29 a year for dogs, or $62.44 a month, and $386.47 a year for cats, or $32.21 a month, according to the North American Pet Health Insurance Association. Cheaper accident-only plans still exist, but they cover a much narrower slice of what sends pets to the vet. The richer plans are the ones owners usually mean when they say they have pet insurance, and those are the plans getting harder to absorb into a household budget. (naphia.org 1) (naphia.org 2) The strange part is that pet insurance is getting pricier even as it keeps growing. NAPHIA says North American written premiums topped $5.2 billion in 2024, up 20.8% from 2023, and the market now covers millions of animals across the U.S. and Canada. More owners are buying coverage because veterinary medicine can now do much more than it could a generation ago: advanced imaging, cancer care, orthopedic surgery, long-term drugs. Insurance makes those options thinkable. It also inherits their price. (naphia.org) (naphia.org) That pressure starts at the clinic. Bank of America Institute reported in May 2025 that pet services, including veterinary care, were 42% more expensive than in 2019, even as pet food inflation had cooled. The Bureau of Labor Statistics’ February 2026 consumer price index still showed “pet services including veterinary” rising faster than overall inflation over the previous year. When the underlying care keeps getting more expensive, insurers either charge more, narrow coverage, or both. (institute.bankofamerica.com) (bls.gov) Pet insurance also works in a way that makes rising prices especially visible. Most plans reimburse after the owner pays the vet, rather than paying the clinic directly. They usually exclude pre-existing conditions, often impose waiting periods, and let buyers choose deductibles, reimbursement rates, and annual caps. A low premium can mean a high deductible, a lower reimbursement percentage, or a tight annual limit. The policy may still help in a crisis, but it may not feel like the blanket protection people imagine when they first hear the word insurance. (content.naic.org) (nbcnews.com) Regulators are starting to catch up with that confusion, but they cannot repeal the economics. The NAIC’s pet insurance model law pushes insurers to spell out waiting periods, exclusions, deductibles, and payout limits more clearly, and several states have moved in that direction. At the same time, some carriers have sought large rate increases. In California, regulators approved a 14% overall increase for Lemonade pet policies that took effect in late 2024, lifting the average annual premium to about $827; earlier approvals let Metropolitan General, which backs MetLife and Embrace pet products, raise some rates by 56%. (content.naic.org) (insurify.com) (insurify.com) The result is a market that is bigger, more useful, and less comforting than its sales pitch suggests. America has about 94 million pet-owning households, APPA says, but insured pets are still a small minority. Some owners will keep paying because one emergency surgery can wipe out years of premiums in a single night. Others will choose a savings account instead, or a leaner policy that covers only catastrophe. The decision now looks less like buying peace of mind and more like choosing which risk you can live with when the dog starts limping on a Sunday afternoon. (americanpetproducts.org) (naphia.org)