US Pet Insurance Market Reaches Unprecedented Heights in 2025

The American pet insurance landscape witnessed unprecedented expansion throughout 2025, culminating in record-high enrollment figures and financial gains. This substantial growth underscores a rising commitment among pet owners to safeguard their animal companions' health. The North American Pet Health Insurance Association (NAPHIA) published its comprehensive 2026 industry report on June 21, providing detailed insights into the market dynamics in both the United States and Canada. The findings reveal a significant increase in the number of insured pets and a notable surge in gross written premiums, even as the rate of premium growth saw a slight deceleration compared to previous years. The report emphasizes the dominant role of canine coverage within the market and highlights regional variations in pet insurance adoption and premium generation.
Surging Pet Insurance Adoption and Premiums
The year 2025 marked a new peak for pet insurance in the US, with coverage extending to approximately 7 million animals, a 9% year-over-year increase and a staggering 76% surge over the past five years. This expansion saw the overall penetration rate reach 4.3%, with dogs leading at 6% (around 5.2 million insured canines) and cats at 2.3% (roughly 1.7 million insured felines). The financial footprint of this growth was equally impressive, as gross written premiums (GWP) soared to a record $5.7 billion. While the GWP growth rate moderated to 19.7% for the year, it still signifies a substantial upward trend, driven by consistent increases in average premium costs. California emerged as a frontrunner, contributing nearly 20% to the national GWP, reflecting its large pet-owning population.
The increase in pet insurance penetration across the US in 2025 was a significant milestone, with a total of nearly 7 million pets now covered. This represents a robust 9% increase from the previous year and a remarkable 76% growth over the last half-decade. Dogs continue to be the primary beneficiaries of this trend, making up the vast majority of insured pets. The financial side of the industry also flourished, with gross written premiums (GWP) reaching an all-time high of $5.7 billion. Although the annual growth rate for GWP softened to 19.7% in 2025, it's important to note that this figure still indicates strong market expansion and is largely attributed to the steady rise in average premium costs. Regionally, California played a pivotal role in this expansion, leading the nation in both GWP contributions and pet ownership percentages, followed by states like New York, Florida, Texas, and New Jersey, underscoring the widespread adoption of pet insurance across diverse geographical areas.
Dominance of Dog Coverage and Evolving Premium Structures
In 2025, dogs solidified their position as the primary segment of the US pet insurance market, contributing an overwhelming 84.5% of the total in-force gross written premiums. Premiums for canine policies amounted to $4.8 billion, showcasing a substantial 17.6% year-over-year increase and more than doubling since 2021. Meanwhile, cat insurance premiums also saw significant growth, climbing 33.1% to reach a record $880 million, despite a slight easing from the previous year's growth rate. The analysis of average annual premiums revealed interesting dynamics. "Insurance with Embedded Wellness" policies experienced the strongest growth, with cat premiums rising 31.9% to $859 and dog premiums increasing 7% to $1,414. For "Accident & Illness" policies, premiums for cats and dogs grew by 12.6% and 11.5%, respectively, while "Accident Only" premiums remained relatively stable or slightly declined.
The robust performance of the pet insurance market in 2025 was largely propelled by the continued dominance of dog coverage. Canine policies alone accounted for an impressive 84.5% of all in-force gross written premiums, totaling $4.8 billion. This segment experienced a 17.6% increase from the previous year and an astounding 109% growth over the past five years. While cat insurance contributed a smaller share, it demonstrated considerable growth, with premiums surging by 33.1% to $880 million, marking its second-highest annual growth rate in five years. The report also delved into the nuances of average annual premiums across different policy types. Policies that include embedded wellness features saw the most significant premium increases, reflecting a growing demand for comprehensive coverage. Accident & Illness policies also recorded healthy premium growth for both species, indicating a strong market for broader health protection. In contrast, Accident Only premiums showed minimal fluctuation, suggesting a stable but less dynamic segment of the market, as pet owners increasingly seek more inclusive insurance solutions for their companions.