Wondering if pet insurance is worth it? Check out our breakdown of how many pet owners have coverage and why you might want to consider getting a policy for your furry friend.

While a majority (67%) of Americans own a pet, not even half of them own pet insurance. When considering what percentage of pet owners have pet insurance, it is important to note that we aren’t just talking about dogs, but cats, mice, hamsters, chickens, and a wide range of other animals as well.

According to a 2021 industry report by the North American Pet Health Insurance Association (NAPHIA), there were over 3.45 million pets in the US that have pet insurance. This might seem significant, but if you consider that there are somewhere over 144.6 million people with pets, it means that only about 0.26% actually own pet insurance.

Why are there so few pet insurance owners?

This is not because of a lack of pet insurance companies, though. There are countless pet insurance policies that offer accident and illness coverage for dogs, cats, horses, birds, and more. However, what makes most people stop is that people often think that they don’t need pet insurance. While it isn’t an essential service to you, it may actually save your pet’s life when the time comes!

In this article, we will look at how many people in the US have invested in a pet insurance policy for veterinary care and why the issue is so prevalent.

Why go for pet health insurance?

Before understanding the statistics, it is important that we look at why simple pet industry expenditures can end up saving your pet’s life. Whether you are a dog owner or cat owner, these pet industry expenditures may seem wasteful, but if the terrifying situation of money shortage for health coverage arises, it may mark the difference between receiving medical care and the loss of an animal’s life.

Avoiding tough decisions

You may have to make the tough decision of having to put your dearly beloved down when it starts to suffer. To stop your loved one’s suffering, instead of spending thousands of dollars, you may then have to go for economic euthanasia. This is the worst-case scenario that pet owners may have to face without pet health insurance plans.

Keeping your pet safe

This isn’t the only reason why you should go for insurance coverage, though. According to the Insurance Information Institute (III) and American Veterinary Medical Association (AMVA), the primary reason people invest in an insurance policy is to avoid uncertainty about their pet’s medical expenses. You get to keep your pet expenditures in check with insured cats, dogs, and other pets.

Pet ownership & insurance

The concept of a pet health insurance policy is like buying health insurance for yourself. It has several restrictions to keep in mind. In fact, if you choose an insurance provider poorly, there is a very good chance that the average annual premium may be higher for your pet than for yourself or even your homeowner’s insurance (yet another reason I always recommend Lemonade).

Looking at the costs

On average, veterinary care may vary between $140 to well over $2,000 during the first year alone! In severe cases, most pet owners may have to pay over $20,000 during a dog’s lifetime, while horse care can go as high as $500,000, on average. Here is a representation of the estimated medical costs that you may have to bear throughout your pet’s life.

Average Pet Care Costs

ServiceEstimated Costs
Grooming$50-$700 per year
Flea/tick control$40-$250 per year
Spaying$100-$250
Neutering$50-$100
Dental services$50-$300
Vaccinations$10-$1,000
Allergy tests$200-$450
Heartworm tests$50-$100
Infections$40-$250
Digestive problems$200-$1,200
Skin masses/shedding$100-$2,000

These costs are steadily rising as the number of pet owners increases and inflation in general, pet care costs are rising significantly over the years. In fact, 47% of pet owners report being in some sort of debt because of their pets. In times like these, pet owner’s insurance can play a major role in helping you manage your finances better.

Pets as family & rising percentage of pet insurance

The cost of vet visits is steadily on the rise. Along with the pet ownership increase during COVID-19, this has fueled growth in the pet insurance market. Many people now think of their pets as family members. This is because of the rise in the number of pet adoptions following the coronavirus lockdowns. Furthermore, because of this adoption, 85% of dog-owners and 76% of cat-owners consider their animals to be members of their families.

Increase in insurance plans

As a result, a record-breaking 3.45 million pet owners signed insurance policies for their pets in Q1 of 2021. This is the fifth consecutive year that the insurance rates have grown, but so has the pet insurance industry as a whole. Every year, the average costs against accident and illness coverage rise by ~24%.

Looking at the numbers

NAPHIA reports that almost 99.9% of insurance policies for pets are in North America, with an estimated 3.101 million pets being insured by 2020 and 3.453 million by 2021. Out of these:

  • 5 million include dog insurance policies
  • 53 million include cat insurance
  • The remaining is for birds, horses, exotic animals, and even insects (yes, there are insurance policies for insects as well).

Dog vs. Cat insurance policy

This shows that dog insurance is much more common compared to any other animal insurance. From 2019 to 2022, the average number of people and cost of insurance has increased by 22.5% for dogs and 17.1% for insured cats. Combined, this reflects a 19.8% increase in the number of pet insurance holders.

The monthly insurance premiums for pet insurance vary with respect to the pet type as well. For example, the average premium for a German Shepherd stands at $34.42 per month in the US (lowest premium), while for rarer breeds, the premium may go higher than $100. This is why the adoption of insurance premiums is still not as common.

Pet insurance policy by plan type

According to a report by GM Insights, more than 80% of dog owners go for accident and illness insurance plans, while the remaining go for accident-only plans. The former is a comprehensive coverage plan that  covers almost all of the out-of-pocket expenses that you may have to make for pet care. These may include:

  • Diagnostic tests
  • Major and minor surgeries
  • Emergency care
  • Digestive issues
  • Urinary tract infections
  • Broken bones
  • Fight or bit wounds
  • Burns
  • Fever care
  • Major health issues
  • Euthanasia, and more.

In most cases, insurance plans do not cover grooming or hygiene-related issues.

Accident-only coverage

Accident-only coverage, on the other hand, only includes pet injuries. Of course, these plans are relatively more cost-effective than extensive plans. However, they are more common as well. In 2021, for example, accident-only plans accounted for 92% of all policies purchased (a decrease from 97% in 2020).

Global pet insurance market overview

In 2020, the pet insurance industry was valued at $4.5 billion. The market has grown considerably at a compounded annual growth rate (CAGR) of 14.3%. According to this forecast, the market is expected to reach $16.8 billion by the start of 2030 due to the rapid adoption of newer pet insurance plans for all sorts of animals.

Primary focus

While the primary focus of the industry still remains dogs, by volume, if we look at newer pet insurance policies being bought, you will find that the number of cat policies being issued is picking up pace. For cats, accident-only pet insurance is not as beneficial as accident and illness coverage.

This is because cats get into fewer accidents than dogs but tend to have an equal number, if not more, of health issues. By 2023, the percentage of pet owners having pet insurance is expected to be at least three times the number today.

About the author

Chris Muller picture
Total Articles: 197
Chris has an MBA with a focus in advanced investments and has been writing about all things personal finance since 2015. He’s also built and run a digital marketing agency, focusing on content marketing, copywriting, and SEO, since 2016. You can connect with Chris on Twitter.