Pet Insurance is Growing by 20% since Covid in USA

News Desk: Pet insurance remains one of the strongest performers in the U.S. property and casualty market, delivering both rapid expansion and solid profitability.

According to AM Best’s recent market segment report, the line has averaged about 20 percent annual growth since the pandemic and stayed underwriting profitable in 2024 and 2025, with direct premiums written rising 17 percent to roughly $5.5 billion.

The North American Pet Health Insurance Association’s 2026 State of the Industry Report puts the broader picture in sharper focus: about 7.6 million pets were insured across North America at the end of 2025, including nearly 7 million in the United States alone, a 9 percent year-over-year increase in the U.S. market.

That still equates to only 4.27 percent of the roughly 163.6 million dogs and cats in American homes, with dogs covered at a higher rate of 5.99 percent compared with 2.29 percent for cats.

Premiums have climbed alongside the policy count. U.S. gross written premium reached about $5.2 billion in 2025. Average annual costs for the most popular accident-and-illness policies ran roughly $836 for dogs and $435 for cats, or about $70 and $36 a month.

Plans that also include wellness benefits for routine care cost more, averaging $1,414 a year for dogs and $859 for cats. Accident-only coverage remains the least expensive option.

Most policies are written for one year and renewed annually. They typically offer annual benefit limits starting around $2,500 or $5,000 and rising to $10,000, $25,000 or unlimited, with owners choosing deductibles from $100 to $1,000 and reimbursement rates of 70 to 90 percent.

Coverage usually begins after short waiting periods of a few days for accidents and two to four weeks for illnesses. Once a pet is enrolled and the policy stays continuous, many chronic conditions remain covered for life.

The dominant product type is accident-and-illness coverage, which accounts for the large majority of policies and pays for diagnostics, surgery, hospitalization and treatment of both injuries and diseases.

Accident-only plans and optional wellness add-ons for vaccines, dental cleanings and preventive exams round out the choices.

With veterinary costs still rising and most pets still uninsured, carriers continue to see room for further growth while maintaining the underwriting discipline that has kept the niche profitable.