Owning a Pet Just Got More Expensive

Insuring pets in the U.S. is getting costlier for owners, recent data shows, as the business of taking care of companion animals grows and evolves into a billion-dollar industry.

In the U.S., the average accident and illness premium for dogs is now at more than $675 a year, while cats cost more than $383 on an annual basis. This has contributed to the total amount of premiums in the country rising by nearly 22 percent to $3.9 billion in 2023, per data from the North American Pet Health Insurance Association (NAPHIA). There were close to 5.7 million pets insured in the U.S. and about $2.5 billion was paid out in claims.

Part of the growth in owners insuring their pets is the increased desire to mitigate against growing veterinary costs. "At a time when households are experiencing growing financial pressures, pet insurance provides owners with financial protection to cover the rising costs of veterinary care," NAPHIA's Executive Director Kristen Lynch said in a statement.

"Our industry's strong growth is evidence that North American pet families recognize the value of pet health insurance coverage and appreciate the certainty it offers in those instances when their pet has an unexpected illness or injury."

Americans are increasingly worried about the cost of caring for their pets. A Redfield & Wilton Strategies survey conducted from March 23 to 24 on behalf of Newsweek found that 43 percent of the 1,500 eligible U.S. voters polled are concerned about their financial ability to care for their pets.

Insurance costs are going up; now, owners are having to pay $80 per year more for insurance on their dogs, compared to half-a-decade ago, and $27 more on an annual basis for their cats, according to consumer finance website ValuePenguin. Over the last five years, on average the cost of pet insurance has gone up by between 8 and 14 percent for accident and illness policies. Accident-only insurance for dogs has seen the highest jump, 27 percent, over that period, ValuePenguin points out.

The Redfield & Wilton Strategies/Newsweek survey found that 37 percent of respondents would struggle to afford a minor surgery on their pet.

Experts say that low-income homes are particularly struggling with the jump in costs of taking care of pets.

"In the U.S., at least 20 million pets live in homes affected by poverty or in underserved areas where resources are limited or essentially nonexistent," Amanda Arrington, vice president for the Humane Society of the United States' campaign to increase access to care, told Newsweek earlier this month.