Pet insurance is a type of insurance that pays, partly or in total, for veterinary treatment of the insured person's ill or injured pet. Some policies will pay out when the pet dies, or if the pet is lost or stolen.
As veterinary medicine is increasingly employing expensive medical techniques and drugs, and owners have higher expectations for their pets' health care and standard of living than previously, the market for pet insurance has increased[as of?].[1] The cost of veterinary care has increased significantly.[2][3]
History
The first pet insurance policy was written in 1890 in Sweden by Claes Virgin. Virgin was the founder of Länsförsäkrings Alliance, and initially focused on horses and livestock.[4] In 1947 the first pet insurance policy was sold in Britain.[5] As of 2009, Britain had the second-highest level of pet insurance in the world (23%),[6] behind only Sweden. In the United States in 2020, 2.3% of all dogs and 0.4% of all cats were covered by an insurance policy.[7]
Policies
Pet insurance is a form of property insurance rather than health insurance.[citation needed] Insurance companies may limit coverage for pre-existing conditions, giving owners an incentive to insure even very young animals, which are not expected to incur high veterinary costs.[8] Some British policies for dogs also include third-party liability insurance. For example, if a dog causes a car accident that damages a vehicle, the insurer provide payouts to rectify the damage for which the owner is responsible under the Animals Act 1971.[9]
Major pet insurance providers
The pet insurance industry includes a mix of independent specialty insurers, multinational insurance companies, and newer digital-first entrants. Notable examples include:
Trupanion, Inc., an American pet insurance company offering comprehensive accident and illness coverage in North America and other regions. Trupanion is a publicly traded provider known for direct payment options with participating veterinarians.
Fetch Pet Insurance, a U.S.–Canada provider that evolved from Petplan and offers accident and illness coverage through multiple underwriting partners.
Petplan UK, a long-established pet insurer in the United Kingdom covering a range of veterinary treatments and conditions.
Nibbles, a newer entrant based in Austin, Texas, offers pet insurance as an integrated benefit within its credit-card-linked product. The Nibbles Pet Rewards Credit Card provides built-in pet insurance coverage for eligible dogs and cats, along with rewards for pet-related purchases, and processes claims through its card platform. Coverage limits and terms are structured similarly to traditional pet insurance plans but are contingent on active cardholder status.
Other traditional providers in the U.S. and internationally include ASPCA Pet Health Insurance, Embrace, Lemonade Pet Insurance, Pets Best, Figo, Pumpkin, Prudent Pet, and Nationwide (which offers pet policies under various partner brands). Industry lists also include many regional and specialty insurers.
How pet insurance works
Pet insurance policies typically require policyholders to pay for veterinary services upfront and submit claims to the insurer for reimbursement. The insurer reimburses eligible expenses according to the policy’s terms, which may include reimbursement percentages (commonly 70–90%), deductibles, and limits on annual or per-condition benefits.
Waiting periods often apply before coverage begins, and most products do not cover pre-existing conditions. Some insurers offer direct payment to veterinarians if prior arrangements exist between the insurer and the clinic.
Economic effects
Studies have analyzed how pet insurance influences veterinary spending and pet owners’ decisions. Research suggests that insured owners may spend more on comprehensive veterinary care than uninsured owners, reflecting both increased utilization of services and financial risk mitigation. Pet insurance also serves as a financial planning tool for owners, helping to manage unexpected veterinary expenses.
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