I recently went to an urgent care facility in my neighborhood after suffering from gastrointestinal issues for four days. A few hours later, a physician assistant said I had tested positive for Campylobacter, an infectious organism that causes diarrhea, GI upset and vomiting. He prescribed the anti-nausea medication Zofran and three days of the antibiotic azithromycin.
Throughout my Campylobacter experience, I paid nothing out of pocket except $2 and change at the pharmacy. And the entire time, I couldn’t help but wonder: What if human health insurance were like pet health insurance? What if I had to pay out of pocket for all the medical care I received that day and then had to file a claim with my insurance company and wait for reimbursement? How many hundreds of dollars — thousands? — would I have needed upfront? Would those costs have dissuaded me from seeking medical care in the first place?
Pet health insurance helps people budget for veterinary care and is supposed to prevent them from having to make difficult financial choices about what they can afford for their cats and dogs. But since most policyholders must pay upfront, is insurance achieving everything it was intended to solve?
The reimbursement model is an issue in the United States, where the percentage of enrolled pets hovers in the low single digits. It’s closer to 20% to 30% in the United Kingdom and as high as 90% in countries like Sweden.
Pet insurance isn’t new here. Veterinarian Dr. Jack Stephens founded the first North American pet insurer — Veterinary Pet Insurance — in 1980. Nationwide acquired VPI in 2009.
After more than 40 years, why is U.S. pet insurance still struggling to take off? Or is it doing just fine?
“The industry has grown in North America — more than 20% compounded annually in the last five years,” said Bob Capobianco, vice president of the North American Pet Health Insurance Association, a trade group. “Any mature line of business would love to be able to do that. And to be fair, after COVID, we moved all those shelter pets into the denominator, which caused it to rise as our insured pets rose. So, we’re not comparing apples to apples, but we are a healthy and growing industry.”
Dr. Kent Kruse, a former chief operating officer at VPI and a self-proclaimed pet insurance provocateur, agreed that moving adopted shelter pets into the denominator cut into the percentage of insured pets.
“But that doesn’t alter the fact that there are still only about 3% of pets insured in the U.S.,” Dr. Kruse said. (A newly released NAPHIA report says 5.5% of dogs and 2% of cats.) “Considering the total number of pet insurance carriers and the increase in the number of pet insurance aggregators that are flooding social media with advertisements, the percentage remains stubbornly low. In my mind, pet owners just aren’t impressed.”
Industry professionals interviewed for this article addressed five issues potentially holding back pet health insurance.
1. Not Enough Awareness and Education
“It’s crazy to say this after 40 years, but people in the U.S. do not know that pet insurance exists,” said Dr. Ricky Walther, the chief medical officer for the online pet insurance marketplace Pawlicy Advisor. “And when people hear ‘pet insurance,’ the closest thing they hear is ‘human health insurance.’ The reality is those two things couldn’t be further from similar products. They’re totally different. I’m always shocked at how many people don’t know that pet insurance is property and casualty insurance.”
Why not market pet insurance as similar to homeowners or auto policies?
“A wise veterinarian once told me that pet insurance is misnamed,” Dr. Kruse said. “It should be called ‘asset protection insurance’ for those who are wealthy enough to be able to pay the entire veterinary bill upfront and wait to be reimbursed.”
The industry might be getting more than just the name wrong. Dr. Jennifer Sperry, the medical director at Independence Pet Group, the parent company of insurance brands such as Hartville and Figo, said insurers should rethink how they market to and educate pet owners and veterinary professionals.
“We need to change the way we talk about insurance,” Dr. Sperry said. “We tend to talk about it when the pet is adopted, when it’s young and healthy. However, when we think of this as a puppy or kitten discussion and never a discussion for any other time, we’re missing an opportunity to present that tool at a time when people are well aware of the total cost of care.”
Some veterinarians avoid discussing insurance with clients because they don’t want to recommend a specific brand — “sell” insurance — or face a client’s anger after a lousy insurance experience. The conversation can also be daunting to veterinarians who don’t have the time to tackle the topic.
Practitioners don’t have to be insurance experts or recommend a provider. The conversation could be as simple as explaining a few high-level benefits and sending the client online to compare policies.
“They don’t want to get in the middle of it,” said Dr. Jules Benson, a consultant and the former chief veterinary officer at Nationwide Pet. “But they can push it off to a third party like Pawlicy Advisor and tell the client to find out what’s best for them and their pet.”
Initiating the conversation is possible without being forceful or salesy. Dr. Kruse recommends asking whether the pet owner needs assistance with an insurance claim form after an illness or injury visit. If the pet isn’t insured, the veterinarian can remind the client that the visit’s medical services likely would have been covered.
Dr. Sperry said client objections about the cost of care can easily be turned into insurance discussions.
“When a sick pet comes in and the owner is faced with a big bill, they’ll ask about pet insurance. And it’s too late in that instance, but that doesn’t mean it’s too late for future issues,” she said. “We have to get out of the mentality that once there is one preexisting condition, insurance has no value moving forward. Just because a pet has been diagnosed with arthritis doesn’t mean other things won’t come up in the future.”
Whether or not veterinarians talk about pet insurance, they should, at a minimum, post educational information on their website, blog and social media channels. They also can display brochures and fliers in the lobby and arm the staff with basic pet insurance knowledge. Selecting a team member — an “insurance champion” or “claims coordinator” at larger practices — to educate clients and help process claims is another idea.
Experts recommend that in addition to not calling pet insurance “health” or “medical” coverage, the industry should set realistic expectations in pet owners’ minds and educate them about what pet insurance is and isn’t.
“Many consumers don’t necessarily buy pet insurance as a risk-protection product. They often view it as an investment product,” Dr. Benson said. “They think it’s a waste of their time and money if they’re not getting their money back. But that’s not what insurance is.”
Insurance companies could use a collaborative, brand-agnostic approach when communicating with veterinary practices. Multiple players could cohost lunch-and-learns in the hospital and lectures at veterinary conferences.
“We aren’t talking about it the right way with practices,” Dr. Sperry said. “We go into clinics and say, ‘Look at this $30,000 bill we covered.’ What’s more powerful is saying, ‘Look at this $600 problem that we solved for somebody who didn’t have $600 in their back pocket.’ Those are the real heartbreakers for me as a vet and the most common situations I ran into as a practicing veterinarian.”
Dr. Kruse said the industry has failed to educate veterinarians about the advantages of pet insurance.
“Three percent enrollment can only mean one thing, and that is the industry as a whole has failed,” he said. “There are so many statistics on how the human medical profession and the dental profession and the individuals who work in them have benefited financially, and, more importantly, how their patients are well taken care of because of insurance. Pet insurance could do the same thing for the veterinary profession.”
According to Capobianco, NAPHIA is working on initiatives to help improve the visibility and perception of pet insurance.
“Misconceptions can create problems, whether for veterinarians, pet owners or others,” he said. “So, part of this is lifting the veil and educating everybody, which we believe can be a necessary ingredient to growing the line of business.”
2. Not Giving Clients What They Want and Need
“There’s a huge opportunity for us to be more creative,” said Pawlicy Advisor’s Dr. Walther. “We need to be innovative and build products that meet pet owners where they are and give them what they’re looking for.”
Is a better reimbursement model what pet owners want and need? Today, one U.S. pet insurance company— Trupanion — pays veterinary practices directly at the time of service. The company’s 2018 software patent prevents competitors from developing a direct-pay solution.
Dr. Kruse is a vocal opponent of Trupanion’s patent. In 2023, he sent a six-page report to the Federal Trade Commission outlining why he believes the patent restricts access to veterinary care “by preventing multiple members of the pet insurance industry from providing a pet insurance product which is affordable for pet owners.”
According to his report: “Apparently, Trupanion’s latest patent not only protects the design of the software, but also the function. In this instance, the patent-protected function is for the real-time adjudication of the claim, which, in turn, provides for the direct payment of the policy benefit to the veterinarian providing the pet medical services. Several years ago, a second pet insurance carrier was reported to have developed claims adjudication software which had a similar function to the Trupanion product. Trupanion reportedly contacted that carrier and advised them that if they provided that software for use in veterinary offices, the carrier would face legal action for patent infringement.”
Dr. Kruse has not received a response from the FTC.
Not everyone agrees that direct reimbursement is the U.S. pet insurance industry’s biggest hurdle.
“If the reimbursement model was the reason that penetration wasn’t higher, then Trupanion would be more wildly successful than they are already,” Dr. Benson said. “I fundamentally disagree that direct pay is the cure.”
Either way, Capobianco said, NAPHIA members are studying the issue. (Trupanion is no longer a NAPHIA member.)
“From a technology perspective, the industry, our members, are working on ways to better align the payment to the veterinarian with the out-of-pocket responsibilities of the individual,” Capobianco said.
In the meantime, experts say insurance should be only one tool in a practice’s financial solutions toolbelt. Other options include payment, financing and wellness plans from companies like VetBilling, CareCredit and Snout.
Snout, for example, manages wellness plans for veterinary practices, charging pet owners monthly (an average of $40) and paying the practices directly at the time of service. Participating hospitals get multiple benefits in exchange for a small fee, chief operating officer David Nietzke said.
“We’re seeing a 44% increase in average client transaction and a 72% increase in visit frequency,” Nietzke said. “Our average member comes in 5.7 times a year. With veterinary inflation as high as it is, clinics that adapt and help their pet owners combat this will do well. Those that don’t will continue to experience a decrease in visits year over year.”
Another area where pet insurance is falling short of consumer expectations and needs is customer service.
“Most emergency and specialty veterinary hospitals require the pet owner to pay half of the estimated medical fees before treatment can begin,” Dr. Kruse said. “There are too many dramatic stories of insured pets being euthanized because the pet owner couldn’t come up with 50% of the estimated cash required to treat their pet’s medical emergency.”
He said more pet insurers should offer around-the-clock customer service and preauthorize claims for emergency care. To his knowledge, only one company does it.
Capobianco and Dr. Walther said the issue comes down to innovation and creativity.
“How do we, as insurance companies, better understand the position that vets find themselves in?” Capobianco asked. “And how do we collaborate to help create a win for the pet owner and a win for the veterinarian while keeping rates reasonable and still generating a profit for the insurance companies?”
3. Inconsistent State Regulations
Aside from cultural differences between the United States and Europe, the U.S. regulatory environment makes insuring pets more difficult for providers.
“It’s like opening an insurance company in 51 different countries,” said Nationwide’s ex-CVO, Dr. Benson. “It’s unbelievably challenging to write an insurance policy in the U.S. from a logistics point of view, and I don’t think there’s any way to fix that.”
He said that while pet insurance is unlike human medical insurance, it’s also not home or automobile insurance.
“There are differences between those things, not just from a coverage level, but from an emotional level. You can’t necessarily expect the same things to work,” he said.
NAPHIA is pursuing a legislative solution: model law.
“Having a model law, which every state in their own time is considering, codifies disclosures and the ways things are seen so that we can be treated on an equal footing,” Capobianco said. “It’s a lot of work, but it’s also an opportunity for us to be legitimized in the world of insurance. I think it’s a necessary step forward.”
4. Inconsistent and Nonstandardized Coding
Part of the reason direct payment to veterinarians at the time of service is difficult is that pet insurers can’t access enough data to facilitate quick claims decisions. And even if they have access — as with Trupanion’s patented software — the data is often not standardized or coded consistently.
“In the States, we have 97 different flavors of what we call things, from diagnoses to treatments,” Capobianco said. “We’re working with technology to recognize the text, turn it into artificial intelligence that helps us more quickly assess those kinds of issues, and then facilitate the claims payments.”
He said pet insurance should be part of the veterinary profession’s discussions about data standardization.
“The Association for Veterinary Informatics is talking about data standards,” he said. “How does insurance get a seat at that table? How do we find a path forward with the ambition of standardizing everything?”
5. Not Enough Collaboration
“We all want happier, healthier, longer-living pets,” Capobianco said. “We want to stop economic euthanasia. We also want to find solutions for pet owners of different socioeconomic backgrounds. For someone who owns a pet, loves their pet and lets their pet sleep in their bed at night but makes $50,000 a year, how do we make insurance protection approachable for them? We have to partner with other interested parties and make that happen.”
Pawlicy Advisor’s Dr. Walther thinks those partners are all the financial solutions companies.
“Veterinarians are recommending pet insurance as a tool for financially taking care of pets. They’re trying to increase access to care and the affordability of care, but pet insurance cannot accomplish that alone,” he said. “There are a lot of ways for the various pet insurance brands and the other financial tools that exist in the space to work synergistically for everyone’s benefit.”
THE ELEPHANT IN THE ROOM
In 2018, Trupanion secured a utility patent titled “Pet Insurance System and Method” for the company’s proprietary software, then called Trupanion Express. The software integrates directly with practice management systems, enabling direct payment to a veterinary practice at the time of service and eliminating the need for policyholders to pay upfront and wait for reimbursement.
In April 2013, Dr. Kerri Marshall, serving as Trupanion’s chief veterinary officer, appeared on Dr. Doug Kenney’s Pet Insurance Guide Podcast. The two veterinarians had this exchange about the company’s new payment software:
Dr. Kenney: “It seems to me that a significant number of pet owners and pets can be insured that wouldn’t have been eligible for pet insurance before because they weren’t able to pay thousands of dollars on the front end and then wait for reimbursement.”
Dr. Marshall: “I think the reimbursement model is dead, and I think you’re right, that’s the game changer. That’s what’s really different about Trupanion Express. … Hopefully, the other insurance companies will follow suit. I think that this is a good move for veterinarians and will dramatically change the whole environment, not just for pet insurance but veterinary medicine.”
Sarah Rumple contacted Trupanion with questions and received this emailed statement, attributed to CEO Margi Tooth: “Aside from transparency, a key part of the Trupanion product is our ability to pay veterinarians directly at checkout. Pet parents no longer have to wait for reimbursement, making it easier to say yes to care without financial stress. This creates a better experience not just for pet parents but for the entire veterinary industry, reinforcing the value of insurance and helping rebuild the trust that has been eroded by legacy products and companies that entered the market with a bang, only to disappear. By making insurance easier, more transparent and more trustworthy, we are helping to drive overall adoption and penetration rates. There is still work to be done to reach the type of acceptance we have seen in the U.K., but every pet we add to the Trupanion family is a step forward for the pet insurance industry and a step toward a future where cost isn’t a barrier to care.”
Rumple later asked Trupanion: “The patent has been a common thread in the interviews I’ve conducted. Many feel that Trupanion’s patent stifles innovation and prevents the pet health insurance industry in the U.S. from advancing and attracting more pet owners. What is Trupanion’s stance on that?”
Trupanion responded: “We think this is categorically not true. Trupanion’s software benefits the entire pet industry by reinforcing the value of pet insurance and providing a product both customers and veterinarians can trust.
“We can share that in markets where we see a higher adoption of our direct-pay software, we then see a higher adoption of pet insurance as a whole. For example, we have a market in Canada where penetration of our software exceeds 80%, and penetration is double that of Canada overall.
“We also see higher penetration (and, in some cases, much higher penetration) in markets where direct payment was not, or still is not, an option. These markets benefited from the early introduction of high-quality products and veterinary support.
“The broader pet insurance industry in North America has struggled due to poor legacy products and a breakdown of trust between pet parents and veterinarians. Even today, the industry remains vulnerable to other providers choosing to cancel policies without reason. Trupanion, meanwhile, continues to stand by pet parents — recently surpassing $3 billion in paid claims. By making pet insurance easier, more transparent and more trustworthy, we help drive overall adoption and penetration rates.”
WHERE THE SUPPORT LIES
Pawlicy Advisor and the American Animal Hospital Association surveyed 536 veterinary professionals in 2025. Among the takeaways:
- 79% believe that when a client has the right pet insurance policy, the client, pet and veterinary team are better off.
- 87% say pet insurance helps clients say “yes” to more care and provides patients with the best possible care.
- 48% think pet insurance is “important” for their clinic and clients, while 22% believe it is “vitally important” — a game changer for their practice.
- 73% have difficulty talking to clients about pet insurance. About 1 in 5 aren’t sure which company to recommend, and 15% said they don’t have the time to discuss insurance.
PET INSURANCE AT A GLANCE
About three dozen pet insurance brands operate in the United States. According to the North American Pet Health Insurance Association’s 2025 State of the Industry Report:
- As of Dec. 31, 2024, 6.4 million U.S. pets were insured, a 12.7% year-over-year increase.
- U.S. gross written premiums in 2024 amounted to $4.74 billion, a year-over-year jump of 21.4%.
- The average accident and illness premium for a U.S. dog in 2024 was $749.29.
- The average accident and illness premium for a U.S. cat in 2024 was $386.47.