Outlook for pet insurance in 2024

Key points

• Pet health data and information from tech like wearable devices could revolutionize the pet insurance industry.
• More pet insurance companies are offering veterinary payment options, to make the wait for reimbursement less financially stressful.
• States are starting to adopt laws governing pet insurance. 

Pet insurance is growing in popularity with pet owners as a way to offset unexpected veterinary costs. According to the North American Pet Health Insurance Association (NAPHIA), the number of insured dogs and cats in the U.S. has increased 125% since 2018. 

Though a relatively new offering in the insurance industry, pet insurance is expected to continue its rapid growth. Technological advancements, increased cost and more vet payment options are some of the trends we’re seeing in pet insurance for 2024.

As technology improves, so does pet care

Since our pets can’t tell us what’s wrong with them, emerging technologies are looking to do it for us. You’re likely no stranger to wearable devices that track health metrics like your heart rate, activity level and sleeping patterns. More pet insurance companies are working to create wearable devices for pets that can transmit real-time data to pet owners and their veterinarians.

“This data and information will improve pet health care and drive the evolution of pet insurance and the types of offerings we’ll see in the market,” said Lane Kent, CEO of Independence Pet Group.

Veterinarians can create custom 3D-printed orthotics and prosthetics and use artificial intelligence (AI) to analyze genetic information and data to detect and diagnose health problems like cancer.

“We are beginning to see new benefits for cancer and other specific conditions, catastrophic care packages, access to telemedicine and biometric data being used for wellness,” said Kent. 

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As veterinary costs rise, more pet owners invest in pet insurance

Though new technologies are exciting, they also come at a cost, which contributes to rising veterinary expenses. Veterinary costs increased 7.5% from Sept. 2022 to Sept. 2023, according to the Bureau of Labor Statistics’ Consumer Price Index. 

Higher vet costs lead to more expensive pet insurance premiums. According to NAPHIA’s 2023 State of the Industry report, the average cost of an accident and illness pet insurance plan for dogs has increased 14% since 2018. This trend is expected to continue.

“Pet insurance rates are a direct reflection of the cost of veterinary care — which [is] also being impacted by inflationary forces such as the cost of lab equipment, staffing, overhead and medication costs,” said Kristen Lynch, executive director of NAPHIA.

Even so, when faced with rising cost of veterinary care, the cost of pet insurance is worth it to more pet owners each year. The pet insurance industry has seen an average annual growth of 22.5% since 2018, according to NAPHIA’s 2023 State of the Industry report. By the end of 2022, 4.8 million pets were insured in the U.S. 

Pet insurers are working to relieve the burden of upfront veterinary costs

While pet insurance is designed to cushion the financial blow of an unexpected accident or illness, most insurers require you to pay your vet bills in full before filing a pet insurance claim for reimbursement. That means you could be out hundreds or thousands of dollars while you wait for your pet insurance claim to be approved and paid.

Pet owners who can’t absorb the entire upfront cost may delay care or be forced to put the cost on a credit card. However, some pet insurers offer ways to settle the claim faster, or provide interest-free solutions. 

Direct vet pay options

• Fursure pet insurance allows you to apply for a debit card that you can use at the vet for certain covered expenses. You can submit a cost estimate before your vet visit or use the app at checkout to get funds approved for covered care. Once approved, use your debit card to take Fursure’s share out of your pet insurance plan and you only pay your portion of the bill.
• Pets Best pet insurance doesn’t pay your vet at checkout, but if the veterinarian signs a reimbursement release form you can submit it with your claim and the vet will be sent payment if the claim is approved. You’ll pay the balance after the vet is reimbursed for expenses covered by your pet insurance.
• Trupanion pet insurance will pay the vet directly if the vet has Trupanion’s software. The vet’s office will submit the invoice through the Trupanion software and get paid instantly for covered costs, so you’ll only be responsible for your share, such as your deductible and copayment.

Interest-free payment options

• Paw Protect pet insurance gives customers the option to apply for a virtual Visa credit card with a line of credit up to $2,000 through Paytient. After you put your pet’s veterinary care costs on the credit card, you’ll submit the claim through Paw Protect. The reimbursable amount will automatically reduce how much you owe on the line of credit, with only your deductible and copay, if applicable, left remaining to pay. You’ll have 12 months to pay off the balance without paying any interest.
• CareCredit is another option for interest-free payments. If you qualify for CareCredit, you could receive up to 24 months to pay off your pet’s non-covered veterinary expenses with no interest.

Pet insurance is becoming a more common part of employee benefits packages, though uptake has stalled

Sixteen percent of employers now offer pet insurance as an employee benefit, according to MetLife’s 2023 Employee Benefit Trends Study survey. This figure could be a direct response to pet owners’ interest in buying pet insurance to overcome the high cost of dog ownership and increasing economic uncertainties.

About 57% of employees are interested in pet insurance, with 25% considering it a crucial benefit in 2023. Yet only 9% take advantage of employer offerings. 

Brian Jorgensen, head of MetLife Pet Insurance, expects “the distribution of this voluntary benefit to grow in the year ahead.”

Employers can help bridge the gap when offering pet insurance as a voluntary benefit in 2024. 

“It’s important to increase communication around pet insurance during this year’s open enrollment season to ensure employees are protected. Pet insurance doesn’t deplete when used, isn’t affected by inflation and limits the total cost of pet health expenses each year,” said Jorgensen.

What is the Pet Insurance Act? 

The National Association of Insurance Commissioners (NAIC) passed the Pet Insurance Act in 2022. It was created to establish pet insurance industry regulatory standards, such as:

• Adding consumer protections in the form of robust disclosures for various parts of the pet insurance policy, including conditions, benefit schedules, waiting periods and policy limits.
• Dispelling consumer confusion between insurance policies and non-insurance wellness plans.
• Ensuring agents can provide accurate pet insurance information for consumers.
• Limiting the ability of pet insurers to deny claims for covered pets with pre-existing conditions.

Before the Act was passed, California was the only state with specific pet insurance legislation. 

These states now have pet health insurance laws:

• Delaware.
• New Hampshire.
• Louisiana.
• Maine.
• Mississippi.
• Nebraska.
• Washington.

“There is active legislation in process in New Jersey, Ohio and Pennsylvania, and we understand California, New York and Florida have plans to add it to their legislative calendars in 2024,” said Lynch.

How to find the best pet insurance in 2024

Looking for the best pet insurance for 2024? Here are the factors to consider when comparing pet insurance quotes.

• Choose the right plan. Accident-only policies are cheaper but don’t offer coverage for illnesses, which can include cancer, diabetes and heart problems. Accident and illness pet insurance may be worth the cost unless you only want coverage for emergencies like broken bones, bites, stings and ingesting foreign objects.
• Consider adding a wellness plan. The best pet insurance wellness plans will cover expenses pet insurance doesn’t, such as wellness exam copays, vaccinations, teeth cleaning and prevention meds for fleas, heartworm and ticks. 
• Read the fine print. Like human health insurance, pet insurance has exclusions and limitations, which can vary by plan type and pet insurer. Read the fine print to know what’s covered and what isn’t, such as pre-existing conditions. 
• Verify waiting periods. Most pet insurance plans have waiting periods, which can be up to 12 months for conditions like cruciate ligaments and hip dysplasia. Waiting periods can vary by insurance company and health condition, so verify before you buy. There are also pet insurance policies with no waiting period available.
• Compare quotes with the same coverage details. Now that you know what type of plan is right, it’s time to compare pet insurance quotes. The best way to get an apples-to-apples comparison is to select the same coverage types, limits and deductibles. Not all plans are the same from company to company, so evaluate the premium and overall out-of-pocket costs.