Pet Health Insurance Surges Amid Rising Veterinary Costs and Changing Pet Owner Perspectives
Owners are increasingly turning to pet health insurance to protect their animals from unexpected medical bills. This trend reflects a shift in how people view their pets, and the rising cost of veterinary care.
For 10-year-old Bengal cat Abira, veterinary care included the removal of her uterus due to a bacterial infection and a subsequent surgery to address a cancerous lump. The combined cost of these procedures totaled about $9,000.
“She had ringworm, too, when she was a year old and then she got it a couple of years later,” said Carolina Araya, Abira’s owner. Araya, a 36-year-old Holbrook resident and a human resources director, noted the importance of having health insurance. “I’m glad we had health insurance.”
Araya is among numerous pet owners who have secured pet health insurance to mitigate the escalating costs of medical care. Mostly dogs and cats are insured since they are the most popular American pets, but there’s insurance available for exotic animals such as birds, reptiles, ferrets and rabbits.
Araya pays $140 a month for her Trupanion policy, which covered the majority of the surgery costs. Her breeder recommended health insurance when Abira was younger because the policy price increases as the animal ages.
According to the North American Pet Health Insurance Association’s (NAPHIA) annual State of the Industry Report released in April, nearly 6.25 million pets were insured by the end of 2023. This figure includes over 4.459 million dogs and 1.215 million cats in the U.S. The pet insurance market expanded by 16.7% from the 5.3 million pets insured in 2022.
The rising popularity of pet health insurance is linked to owners increasingly seeing their pets as integral family members, coupled with affordability challenges due to high veterinary costs.
“My mother knows a woman who couldn’t afford health care for her cat, so it had to be put to sleep. I wouldn’t want that to happen.”
According to the NAPHIA report, the U.S. pet insurance market saw premiums jump nearly 22% to $3.9 billion in 2023. NAPHIA’s data represents approximately “99%” of the policies active in the U.S. and Canada.
Pet health care costs are rising, but authorities note changing perspectives on pet ownership are also influencing this trend. Pets are often considered a “child” in the family and meeting their health needs is important for them to have long, healthy lives.
“We treat them as if they’re our children,” said Gabrielle Brittman of her two Shih Tzus, 1-year-old Millie and 7-month-old Lacey. She pays about $60 / month for each dog through Nationwide, with coverage that includes medicine for fleas and ticks, wellness visits, and shots.
“Bills can be $500 and I end up paying only about $100,” Brittman said. “It gives you peace of mind. You can get proper care for your animal rather than worrying about paying the bill. I don’t know anyone [with dogs] who doesn’t have it.”
Kristen Lynch, NAPHIA executive director, noted that, for decades, veterinarians were limited to “basic things” for pets in need of medical care so getting insurance was once seen as frivolous. However, today procedures such as dental surgeries can be performed. Advances in pet healthcare are following human health advancements, Lynch said.
The highest claim paid out in New York in 2023 was for a 6-year-old female French bulldog from Manhattan that received treatment for a corneal ulcer at a cost of approximately $43,300. This was the sixth-highest payout for dog claims in North America. The highest payout in New York for cats was for an unspecified medical treatment for a 2-year-old British shorthair, also a Manhattan resident, totaling about $33,000.
Lynch noted that the first pet to have health insurance in the U.S. was Lassie, the television series star, which was covered in 1982 by VPI (now Nationwide).
Typical pet insurance coverage today includes accidents, wellness visits, surgeries, and more. Most policies cover accident and illness. The average annual insurance premium for 2023 with wellness was $1,263.39 (about $105 per month) for dogs and $625.99 (about $52 per month) for cats. Accident and illness policies averaged $675.61 (about $56 a month) for dogs, and $383.30 (about $32 a month) for cats. A “bare bones” accident-only policy cost $204 (about $17 a month) for dogs and $115 (about $9 a month) for cats.
Lynch commented on the shift in attitudes about pet ownership. Historically, if a pet became ill, owners might simply replace it. However, pets are now recognized as essential family members.
In addition, Lynch believes the challenging economic environment has fueled interest in pet health insurance.
During the COVID-19 pandemic, people became even more attached to their pets due to spending more time at home. “Now people take their pets on vacation, to college, shopping, they’re doing social things with their pets … it’s changed,” Lynch said.
According to Lynch, the intention behind acquiring health insurance for a pet is to prevent what she calls “economic euthanasia,” ensuring that people can provide their pets with care even during financial uncertainty. “It’s, ‘I want my pet, I love my pet, I love having them around, but now my income is uncertain.’ Pet insurance is proactive instead of reactive.”
Kimberly Palmer, a personal finance expert at NerdWallet, agrees.
“The increasing popularity of pet insurance is closely related to the rising cost of medical care for pets,” Palmer said. “It can run in the thousands of dollars, and many pet owners say they are willing to go into debt for their pets, so purchasing health insurance can be a way of protecting your budget.”
Palmer does, however, issue a warning; all pet insurance plans are not created equal.
“You want to make sure you understand the details of the pet insurance policy because they vary widely and you don’t want to be surprised if it doesn’t cover something,” Palmer said.
She adds that a plan’s coverage of pre-existing conditions and preventive care is always worth reviewing before purchase.
At Dix Hills Animal Hospital, new pet owners receive a welcome packet with insurance recommendations.
“We try to educate all our new pet parents, especially first-time puppy and kitten owners, on the importance of pet insurance, and advise to get it while they’re young so there are no preexisting conditions that would prevent them from coverage and reimbursement,” said Cindy Sorensen, practice manager.
Assistant practice manager Danielle Drucker said pet owners are more open to the idea of pet insurance.
“We have seen a steady increase in insured pets at our hospital for many years, more so in recent years,” Drucker noted. “Our clients are more open to having conversations about pet insurance, and they are asking more questions and educating themselves.”
Sheila and Chris Korte, of Babylon, emphasize that their 3-year-old Bracco Italiano, Riley Rose, is a valued family member. They aim to provide her with the best possible healthcare. However, they saw that the health care expenses were getting very high.
“She’s so darn smart she has people-like qualities,” said Sheila Korte, 69. “In December of last year, we got insurance for her — she was getting these big moles on her ears and had to have surgery.”
Korte said that once the vet bills started piling up, the couple “got educated” about pet insurance and purchased a Fetch policy. “When she was spayed when she was 6 or 7 months old, that was about $500,” Korte said. “And then she used to swallow things and we had to go to a 24-hour vet clinic three or four times. Each time was about $600, and if we did more testing it was going to be between $1,500 and $2,200.”
Marisa Moschera, 30, of Miller Place, hasn’t signed up for pet health insurance yet, but she said she’s thinking about it. She has two male sphynx cats, Leo and Jax, and said she’s “always taking them to the vet” because of the chronic conditions that come with their being hairless.
Her bills for Leo and Jax so far have totaled around $4,500. Moschera, a senior executive assistant for Suffolk Regional Off-Track Betting, is hesitant to add another monthly bill to her list, but she said she will sign up for pet health insurance if it is the best solution.
Top Pet Health Insurance Claims
The most frequent categories for pet health insurance claims filed in 2023 (in order):
DOGS
- Gastrointestinal
- Allergies
- Kidney and bladder
- Ear infection
CATS
- Urinary tract infection
- Kidney and bladder
- Gastrointestinal
- Breathing issues
