What to do now
- Most pet insurance pays you back after you pay the vet. You choose a deductible, a reimbursement percentage and an annual limit, and those three choices drive the price.
- U.S. averages for 2025: accident-and-illness plans were $836/year for dogs and $435/year for cats (NAPHIA).
- Conditions your pet showed signs of before coverage started are usually excluded, so enrolling while your pet is young and healthy matters.
- Under the NAIC model law, illness waiting periods are capped at 30 days and accident waiting periods aren't allowed. Check what your state requires.
- Get at least three quotes for the same deductible, reimbursement level and limit so you're comparing like with like.
In this article
A surprise vet bill is one of the most stressful parts of owning a pet. Pet insurance is one way to plan for it, but the policies use their own vocabulary. Here’s how coverage works, what people are paying right now, and how to compare quotes without getting caught out.
The basic model: you pay, then you’re reimbursed
With most U.S. pet insurance, you pay the veterinary bill, submit a claim, and the insurer reimburses part of it under your policy’s terms. Three settings drive both your premium and your payout:
| Setting | What it means | Effect on price |
|---|---|---|
| Deductible | The amount you pay before the policy starts reimbursing (often per year) | Higher deductible = lower premium |
| Reimbursement rate | The share of covered costs the insurer pays after the deductible (e.g., 70%, 80%, 90%) | Higher rate = higher premium |
| Annual limit | The most the policy pays in a policy year (some plans are unlimited) | Higher limit = higher premium |
A quick worked example (illustration only): with a $250 deductible and 80% reimbursement, a $2,000 covered bill works out to ($2,000 − $250) × 80% = $1,400 back to you, assuming you hadn’t met the deductible yet that year.
The three main types of plans
The industry tracks three main kinds of products:
- Accident-only: covers things like swallowed objects, cuts, car accidents, ligament tears and poisoning.
- Accident & illness: everything above, plus illnesses like cancer, infections and digestive problems. This is the most common kind of comprehensive coverage.
- Wellness add-ons: routine care such as vaccines, screenings and dental. These are sold as riders on a policy or as separate wellness programs.
Under the NAIC model law, a wellness program sold separately is not insurance. It can’t be marketed as insurance, and you can’t be required to buy one to get a policy.
What people are paying (2025 data)
NAPHIA’s 2026 report, which covers calendar year 2025, gives these average annual premiums in the U.S.:
| Plan type | Dogs | Cats |
|---|---|---|
| Accident & illness | $836 | $435 |
| Accident only | $190 | $112 |
| Insurance with embedded wellness | $1,414 | $859 |
Accident-and-illness premiums went up about 11.5% for dogs and 12.6% for cats from 2024 to 2025. These are averages. Your quote will depend on species, breed, age, where you live and the three settings above.
For context, NAPHIA estimates 7.6 million pets were insured in North America at the end of 2025. That’s still a small share of U.S. pets: about 6% of dogs and 2.3% of cats.
Fine print to read before you buy
Pre-existing conditions
The NAIC model law defines a pre-existing condition as one where, before coverage started or during a waiting period, a vet gave advice about it, your pet was treated for it, or your pet showed signs or symptoms of it. Insurers can exclude these conditions if the policy discloses the exclusion. This is why enrolling while your pet is young and healthy usually gets you the broadest coverage.
Waiting periods
Under the model law, waiting periods for illness and non-accident orthopedic conditions can’t be longer than 30 days, waiting periods for accidents aren’t allowed, and the waiting period must be disclosed before you buy. Insurers that use waiting periods also have to offer a way to waive them with a vet exam.
Free-look period
The model law includes a 15-day free look: you can return the policy within 15 days of receiving it and get a full refund.
Important: the NAIC model law is a template that states can adopt. The rules that apply to you depend on your state, so check your state insurance department’s website and read the policy’s sample contract before you buy.
Is it worth it for your pet?
Pet insurance tends to make the most sense when:
- An unexpected bill of a few thousand dollars would be hard to cover from savings.
- You’d want to say yes to expensive treatment, like surgery or cancer care, if your vet recommended it.
- Your pet is young and doesn’t have a list of conditions that would be excluded.
If you’d rather self-insure, set aside a dedicated emergency fund for your pet and add to it every month. Either way, decide before an emergency happens.
How to compare quotes properly
- Use the same deductible, reimbursement rate and annual limit for every quote.
- Ask how premiums change as your pet ages.
- Check exclusions for hereditary or breed-specific conditions, dental illness and exam fees.
- Look at how claims are paid (direct deposit, how long it takes) and whether the insurer can pay your vet directly.
- Read the sample policy, not just the marketing page.
We’re a referral service, not an insurance agent. Quotes come from licensed partners, and we may be paid when we connect you, at no cost to you.
Tails & Tips Editors
The Tails & Tips editorial team turns official sources (FDA and AVMA notices, veterinary school guidance, the Merck Veterinary Manual) into short, practical to-dos. This article was checked against 2 cited sources.
Sources
- 2026 NAPHIA State of the Industry Report: Highlights (2025 data) — North American Pet Health Insurance Association
- Pet Insurance Model Act (#633) — National Association of Insurance Commissioners (NAIC)
