Pet Insurance by State: Adoption Is Surging—But Still Tiny

Introduction

Pet health insurance is growing at a record pace across North America – yet remains surprisingly rare overall. By the end of 2024, more than 7.0 million pets were insured in North America, marking roughly a 12% year-over-year increase from 2023. This surge underscores a rising awareness of pet insurance as veterinary costs climb and pets are increasingly seen as family. However, despite double-digit growth, only a tiny fraction of pets are covered – highlighting a vast untapped market.

Rapid Growth: 7 Million Pets Insured in 2024

According to the North American Pet Health Insurance Association (NAPHIA), the pet insurance industry has been on a strong growth trajectory. In the United States alone, 6.4 million pets were insured by year-end 2024, up from about 5.7 million in 2023. That 12.7% annual growth reflects a continuation of the post-pandemic boom (though growth has tempered from the ~28% spike seen in 2021). In fact, the number of insured pets more than doubled from just 3.1 million in 2020 to 6.4 million in 2024.

Pet insurance premium volume has ballooned as well. U.S. insurers wrote $4.74 billion in premiums in 2024 (up 21% year-over-year), and over $5.2 billion including Canada. This marks the first time the North American market crossed the $5B threshold. With ~20% average annual growth in recent years, pet insurance has become one of the fastest-growing lines of insurance.

Several factors fuel this growth: product innovation, new insurance brands, stronger human–animal bonds, and rising veterinary costs. Even with economic uncertainties, the value proposition resonates with pet parents who want to avoid tough financial choices when their pet gets sick or injured.

Another noteworthy trend is the broadening mix of insured pets. While dogs still dominate policies, cat insurance is growing faster. Dogs made up about 75.6% of insured pets in the U.S. in 2024, with cats at 23.5%. Just a few years ago, cats were only around 20% of insured pets. In fact, the number of insured cats grew by roughly 23% in 2024, far outpacing the ~10% growth for dogs. Cats remain underinsured relative to their population, but the gap is beginning to close.

Still a Drop in the Bucket: ~4% of Pets Covered

Despite millions of insured pets, penetration remains low compared to the total pet population. As of 2024, U.S. market penetration was only about 3.9% of all pets (out of ~163.6 million cats and dogs nationwide). For dogs, roughly 1 in 18 (5.5%) have insurance, while for cats only about 1 in 50 (2.0%) are insured.

These rates have inched up but remain far behind countries like Sweden (80% insured) and the U.K. (~30%). Lack of awareness and misconceptions about pet insurance are key reasons for slow uptake in America. Many owners assume it works like human health insurance, when in reality it functions more like property/casualty coverage.

Importantly, penetration is rising steadily. The overall insured-pet count has been growing 12–17% annually in North America. At that pace, penetration could double within a few years – but even then, only 8–10% of pets would be covered. That illustrates both the huge growth potential and the long road to mainstream adoption.

Where Coverage Is Taking Off: State-by-State Trends

Pet insurance adoption isn’t uniform across the map. Population size, income levels, and cultural factors all play a role.

• California leads by a wide margin, with about 18% of all insured U.S. pets. The state was also the first to regulate pet insurance (2014).
• Following California are New York (7.2%), Florida (6.3%), and Texas (5.5%). Together, these four states account for more than one-third of insured pets nationwide.
• States like New Jersey, Massachusetts, Washington, and Colorado also show above-average adoption, often correlating with higher premiums and vet costs.
• Meanwhile, many Southern and Midwestern states lag behind, with Mississippi, Louisiana, Alabama, and Arkansas among the least expensive (and least adopted) pet insurance markets.

In Mississippi, lawmakers highlighted the business potential by passing a pet insurance law in 2023, signaling that adoption is spreading beyond traditional strongholds.

From 2022 onward, numerous states have moved to clarify and regulate pet insurance as a distinct product. As of late 2024, 14 states had enacted consumer-protection laws aligned with the National Association of Insurance Commissioners (NAIC) model, and six more were actively considering similar legislation. These laws mandate clearer disclosures and standardized rules on pre-existing conditions and waiting periods, aiming to boost consumer trust.

Where pet insurance adoption grows, veterinary practices see more frequent visits and advanced treatments. Research shows insured pet owners are more likely to pursue recommended care. The American Veterinary Medical Association officially endorses pet health insurance as a way to facilitate optimal care.

Should You Buy Pet Insurance? See How Your State Compares

With adoption surging yet still relatively rare, many pet owners are asking: is pet insurance right for me?

If you live in states like California or New York, you’re surrounded by many fellow policyholders, which can make it easier to find recommendations or firsthand experiences. In states like Mississippi or Louisiana, adoption is newer and premiums may be lower – but policy details should be vetted carefully.

Regardless of location, the core driver is the same: veterinary costs are rising year after year. A single emergency surgery or chronic illness can cost thousands. Pet insurance, typically averaging $30–$60 per month in premiums, can offset a large portion of unexpected bills.

The decision depends on your pet’s species, breed, age, health history, and your financial ability to handle emergencies. With NAIC-inspired laws spreading, policies are becoming clearer and more consistent across states.

For now, with only ~4% of U.S. pets insured, pet insurance remains a niche product. But adoption is growing fast. Many who purchase coverage report relief when costly emergencies strike – they can simply say, “insurance has it covered.” That peace of mind is why millions more are expected to join in the years ahead.

Sources

• North American Pet Health Insurance Association (NAPHIA) – naphia.org
• American Veterinary Medical Association (AVMA) – avma.org
• Insurance Information Institute – iii.org
• The Insurance Emporium (U.K. comparison) – theinsuranceemporium.co.uk
• InsuranceNewsNet (state adoption trends & legislation) – insurancenewsnet.com