As pet ownership rises across the United States, so do the financial, liability and insurance considerations that come with it, according to the Insurance Information Institute’s (Triple-I) latest members-only Issues Brief, Pet Insurance: State of the Risk.
Pet ownership rose to 95 million U.S. households in 2025, the American Pet Products Association reported, with Americans projected to spend $165 billion on pet care in 2026. As pets are increasingly viewed as family members, demand for insurance products designed to address pet-related risks continues to grow.
“Pets are deeply integrated into American households, but with that companionship comes financial responsibility and risk,” said Triple-I CEO Sean Kevelighan. “Our latest Issues Brief helps consumers understand the insurance protections available to manage veterinary expenses, liability exposures and business-related pet care risks.”
Pet Insurance Market Sees Continued Growth
Demand for pet insurance continues to rise as veterinary costs increase and owners seek greater financial protection.
According to Triple-I’s analysis:
- The U.S. pet insurance market has grown by more than 10% annually since at least 2018.
- Direct premiums written reached a record $5.47 billion in 2025.
- Most major pet insurers posted double-digit premium growth last year.
Still, fewer than 4% of U.S. pets are insured, according to the North American Pet Health Insurance Association.
Pet insurance typically covers accidents, illnesses, and, in some cases, hereditary or congenital conditions. Optional wellness plans may also help cover preventive care, such as vaccinations and annual exams.
Liability Risks Extend Beyond Veterinary Costs
The Issues Brief also highlights liability risks associated with pet ownership. According to Triple-I’s analysis:
- Insurers paid $1.86 billion for dog-related injury claims in 2025.
- The average claim cost reached $65,450.
Homeowners and renters insurance policies generally include personal liability coverage for pet-related incidents, subject to policy terms and limits.
Coverage Gaps for Pet Care Businesses
Triple-I warned pet sitters, dog walkers and in-home pet care providers may face significant coverage gaps if relying solely on homeowners, renters or standard general liability policies.
Standard policies often exclude:
- Business-related activities conducted in the home.
- Damage involving animals under a business’s care, custody or control.
Specialized pet business liability coverage, endorsements or inland marine coverage may be necessary depending on the services provided.
“Whether you own a pet, transport pets or operate a pet care business, understanding where your insurance coverage begins and ends is critical,” Kevelighan said.
About the Insurance Information Institute (Triple-I)
Since 1960, the Insurance Information Institute (Triple-I) has been the trusted voice of risk and insurance, delivering unique, data-driven insights to educate, elevate and connect consumers, industry professionals, policymakers and the media. An affiliate of The Institutes, Triple-I represents a diverse membership accounting for nearly 50% of all U.S. property/casualty premiums written. Our members include mutual and stock companies, personal and commercial lines, primary insurers and reinsurers – serving regional, national and global markets.
About The Institutes
The Institutes® are a not-for-profit comprised of diverse affiliates that educate, elevate, and connect people in the essential disciplines of risk management and insurance. Through products and services offered by The Institutes 20 affiliated business units and backed by more than 115 years of experience as a trusted knowledge partner, we empower people and organizations to help those in need with a focus on understanding, predicting, and preventing losses to create a more resilient world. Learn more at Global.TheInstitutes.org.
The Institutes is a registered trademark of The Institutes. All rights reserved.
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