MALVERN, PA — Insurance Information Institute reported U.S. pet insurance premiums climbed to a record $5.47 billion in 2025 as rising veterinary costs and escalating liability payouts push more households to seek financial protection tied to pet ownership.
The industry group’s latest analysis showed the pet insurance market has expanded by more than 10% annually since at least 2018, even though fewer than 4% of U.S. pets are currently insured.
The growth reflects mounting economic pressure on pet owners as animal care costs increasingly mirror broader healthcare inflation trends. Americans are projected to spend $165 billion on pet care in 2026, according to data cited from the American Pet Products Association, while pet ownership has risen to 95 million U.S. households.
At the same time, liability exposure tied to pets continues climbing for property insurers and consumers.
According to Triple-I’s analysis, insurers paid $1.86 billion for dog-related injury claims in 2025, with the average claim reaching $65,450.
Most homeowners and renters insurance policies include personal liability protection for pet-related incidents, though exclusions and coverage limits vary across carriers and policies.
The report suggests insurers are benefiting from rapid premium growth in a market that remains relatively underpenetrated despite increasing consumer adoption. Most major pet insurers posted double-digit premium growth last year, according to the analysis.
Pet insurance policies typically cover accidents and illnesses, with some plans extending to hereditary conditions and preventive care through supplemental wellness coverage.
The report also pointed to operational and liability risks facing pet care businesses, including dog walkers, pet sitters, and in-home animal care providers.
Triple-I indicated standard homeowners, renters, and general liability policies frequently exclude business-related animal incidents or damage involving pets under a company’s care, custody, or control, potentially leaving small operators exposed without specialized coverage.
“Whether you own a pet, transport pets or operate a pet care business, understanding where your insurance coverage begins and ends is critical,” Triple-I Chief Executive Sean Kevelighan said.
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Alice J. Roden started working for Trending Insurance News at the end of 2021. Alice grew up in Salt Lake City, UT. A writer with a vast insurance industry background Alice has help with several of the biggest insurance companies. Before joining Trending Insurance News, Alice briefly worked as a freelance journalist for several radio stations. She covers home, renters and other property insurance stories.