If you ask pet parents what their pets mean to them, the answers are nearly universal: joy, comfort, and companionship. In fact, a 2024 survey from Mental Health America and the Human Animal Bond Research Institute found that 79% of owners say their pet makes them happier, while 98% report health benefits like reduced loneliness or emotional support.

But there’s another side to pet parenthood that’s harder to talk about: the cost. Veterinary care has become more advanced — and more expensive. Over the last decade, vet costs have climbed 60%, with lifetime care averaging $34,000 for dogs and $32,000 for cats. Nearly 80% of pet parents underestimate those expenses.

To get perspective on what this means for families — and for the pet insurance industry — we sat down with Lior Keren, President of Pumpkin Pet Insurance, to talk about the realities behind the numbers, why premiums are rising, and how pet parents can prepare.

The costs of pet care have been rising fast. What does that mean for the average pet parent?

As the president of Pumpkin Pet Insurance, as well as a board member on NAPHIA, Lior Keren believes that pet parents could be better informed about the cost of having pets. 

“A lot of families are caught off guard when they encounter their first big expense at the vet. In recent years, those surprise bills have become the norm because cost expectations haven’t risen to match the standard of care. We’ve seen costs rise about 60% in the past ten years, and lifetime care for a dog or cat can easily hit over $30,000. But most people don’t expect that.”

When a vet bill reaches $2,500 or more, 55% of pet parents say they’d consider economic euthanasia. In many cases, these bills are related to pet emergencies. But how often do these happen?

Pet emergencies are common, with one of the top reasons for ER vet visits being a swallowed object. Pet parents with young and healthy pets are thrown into emotionally stressful emergencies that are compounded by financial stress. Argus is one cautionary tale. When he swallowed rocks as a puppy, his pet parent faced over $12,000 in vet bills.

As Keren puts it, “with insurance, emergency care discussions look different. In 2024, Independence Pet Holdings (one of the largest portfolios of pet insurance companies in the U.S). processed over $1 billion in claims. The average claim was $540, and reimbursements averaged $260. For the bills over $2,500, almost 70% of insured families kept their out-of-pocket costs below that euthanasia threshold. That’s the power of coverage. It keeps pets in treatment and out of heartbreaking situations.”

A Pumpkin Pet Insurance plan came through for Argus, reimbursing his parent for 90% of eligible expenses after the deductible was met –– a total of $10,644. Pet insurance isn’t just for emergencies though. It’s how many pet parents prepare to pay for a higher standard of care when their pet is sick, gets injured, or needs help with behavioral health issues. 

Why has the cost of pet healthcare risen so much in recent years?

The price of veterinary care hasn’t just crept up — it’s surged over the past decade. This includes everything from routine visits to advanced tests. But why? The answer lies in a mix of progress and pressure:

• Advanced treatments are now the norm. From MRIs and CT scans to chemotherapy and regenerative medicine, pets are receiving the same level of sophisticated care as humans. These treatments save lives, but they’re expensive.

• Pets are living longer. Better nutrition, preventive medicine, and improved diagnostics mean our pets are healthier than ever. But with longer lifespans come more years of medical expenses.

• Veterinary staff shortages. With fewer professionals entering the field and rising demand for services, clinics are raising prices to manage staffing and workloads.

Together, these factors explain why today’s veterinary bills can look shockingly high. Expenses can skyrocket quickly from a few hundred dollars for routine care, to thousands when advanced diagnostics or emergency treatment are involved.

Keren believes that “there’s a common misconception within the pet healthcare space that veterinary practices are price-gouging their clients and charging excessive fees because they want to make more money. What most people don’t know is that veterinarians and staff attend about the same amount of school as human physicians and technicians, but are paid a fraction of the salary.” 

He went on to explain that veterinarians, veterinary technicians, and practice managers aren’t in it for the money. “They go into the industry because they love pets. It’s the advances in medicine and overall elevation of pet care standards that have resulted in rising costs. Our pets are part of our families, so they should receive the same standard of care. The main difference between human healthcare and pet care these days is the gap in insurance coverage.”

Why do pet insurance premiums keep climbing? 

For pet parents who have opted to cover their loved ones with pet insurance, you’ll often see reviews and comments online about the high cost of premiums. This begs the question, why do pet insurance premiums feel like they are constantly rising? The truth is, they reflect the real cost of care — and the costs are rising for the same reasons pet insurance is needed:

• Advanced veterinary care is now the standard.

• Pets are living longer.

• Insurance coverage has broadened, including more treatments than ever before.

• Veterinary staff shortages have created a gap in supply where there is high demand for specialized care. 

These factors all increase “loss cost” — the average paid in claims — which directly influences premiums. At its core, pet insurance is based on risk pooling — many pet parents pay into a shared pool of resources, and those funds are used to reimburse the families who face unexpected medical bills. Without wider adoption of pet insurance, the pool of covered pets remains too small, keeping premiums higher.

Pet Insurance as a Tool for Equity in Pet Health

Today, only 4% of U.S. pets are insured. That leaves millions of families vulnerable to financial strain. Notably, the largest segment of dog owners in the U.S. earns between $50,000-74,999 a year, while cat owners earn $30,000 or less, making a single emergency vet bill potentially devastating.

Expanding insurance participation is about more than sustainability — it’s about equity. A larger, more diverse risk pool makes premiums more stable and accessible, ensuring that families across income levels can access care.

Pet insurance can be life-saving for both pet parents and pets. It’s not just pet parents who can better prepare for the financial responsibility of having a pet. Pet insurance companies are also adapting to the higher cost of care in urgent situations. Pumpkin recently launched

PumpkinNow^TM, an urgent pay service that seeks to answer the need of pet parents in critical care situations. 

"When your pet is hurt or sick, you should know exactly what is covered on the spot," said Julia Sosa, Chief Experience Officer for Pumpkin. Claims processing has always been a point of frustration for pet parents, in some cases, waiting months or weeks to be reimbursed. 

"PumpkinNow is a novel, point-of-care experience that provides coverage clarity, expedited claims approvals, and payments for covered expenses within 15 minutes –– all before a pet owner checks out and pays their vet bill. It's the type of service we'd want for our own pets,” said Sosa. 

Keren described this new product as a “natural progression” to advance the experience pet parents have with pet insurance for “the uncompromising care that pets deserve.”

The industry’s responsibility is to evolve coverage to meet modern realities, while keeping affordability and accessibility front and center.

Where does pet healthcare go from here?

Veterinary medicine will only advance further, but without proper financial tools, millions of families will face impossible choices.

The future of pet insurance depends on making coverage both sustainable and inclusive.

For pet parents, that means thinking of insurance as essential to caretaking — not an optional add-on. For insurers, it means adapting to a new era of pet parenthood — one where love is abundant, but costs are rising.