Imagine it’s 3.42 AM, and Emma’s phone has started buzzing. Her dog’s smart collar has significantly detected an irregular heartbeat. By 3.45 AM, her Pet Insurance app had scheduled a virtual vet visit, which included pre-authorized testing, and adjusted her coverage- all these while she was asleep.
Five years ago, the same emergency situation would have cost $3,500 out of pocket, and the three weeks of claims processing. This is Pet Insurance in 2025, and the technology has just improved it, calling for a complete reimagination of Pet Insurance.
Read on to explore more.
The Pet Insurance Paradox: Why Technology Matters More Than Ever
For decades, Pet Insurance has existed in a more peculiar paradox- the pet owners loved their animals enough to spend billions on premium food, designer accessories, and luxury boarding; however, only 4-6% of the Pet owners in the US have purchased Pet Insurance as recently as 2020. The industry was tiny, fragmented, and also largely ignored by mainstream insurers.
Amid a scenario, something changed; the Global Pet Insurance market essentially surged from $9.6 billion in 2023 and is also projected to grow at a staggering 16.4% CAGR through 2032. In the US alone, the Pet insurance market had exceeded $4.7 billion in 2024, with the projections showing that it could reach a whopping $15.71 billion by 2030, which represents a 20.98% annual growth.
Looking at the Old Model of Pet Insurance
To understand the impact of technology, it’s important to understand what was broken:
The Opacity Problem
One of the key issues with the older Pet Insurance is its transparency. Earlier, the Pet Insurance plans were quite difficult to compare and did not have a touch of personalization, which forms the root of Pet Insurance adoption today. Even well-informed customers with time to research struggled to determine which was truly the best Pet Insurance for their situation.
The Claims Nightmare
The traditional Pet Insurance operated on a reimbursement model, which meant the policyholder would pay the vet bill, and the amount would be reimbursed once they submitted their claims. However, for most pet owners, this would mean carrying a significant credit card debt for emergency procedures, making heartbreaking decisions based on immediate cash availability instead of their pet’s needs.
The Trust Gap
One of the critical issues with the older Pet model is the inability to enforce the ability. Unlike Health Insurance for humans, Pet insurance has no standardized regulations that require coverage of minimums or coverage protections. The claims denial rates have significantly varied, where some of the insurers routinely denied the legitimate claims, betting that most of the Pet owners would not fight back over a few hundred dollars.
The industry’s reputation has also significantly suffered amid this. Pet owners have heard horror stories about paying premiums for years, only to be denied when their dog or cat actually needed expensive treatment.
While these hiccups dominated the traditional Pet insurance model, head to the next section to decode the top technological trends that are revolutionizing this situation.
Top Revolutionary Technological Trends
Technology is playing a key role in revolutionizing the hurdles that the old Pet Insurance model faced; here are the ones:
Wearable Technology and Preventive Care
The smart collars and wearable devices are transforming Pet Insurance from reactive to a more proactive model. These are the devices that essentially monitor the vital signs continuously, track activity patterns and behavioral changes, detect early warning signs of common conditions, which automatically alert the Pet owners and the vets to the anomalies.
The Pet wearable technology is capable of sending notifications about the changes to your Pet’s vital signs; however, these are devices that are not widely integrated with any of the insurance policies. However, this is changing rapidly. The progressive insurers are offering good premium discounts for wearable adoption, using the data to identify and prevent Health issues before they become expensive, and also adjust the coverage dynamically, which will be based on actual health metrics rather than just the age and breed.
AI-powered Underwriting and Personalization
Artificial Intelligence has revolutionized the way insurers assess risk and design Pet Insurance plans. The traditional underwriting essentially relies upon crude variables such as breed, age, and location. The AI models essentially incorporate vast amounts of data such as breed-specific genetic predispositions, owners’ lifestyle and the activity level, veterinary history patterns, environmental risk factors, and even the behavioral indicators from smart home devices.
Additionally, AI has also enabled dynamic coverage recommendations. For instance, when a puppy approaches where certain breed-specific conditions typically emerge, the insurance app proactively suggests adding more relevant coverage before the condition develops.
Telemedicine Integration
The pandemic has significantly accelerated the telemedicine adoption for humans, but its impact on Pet Insurance adoption has equally been dramatic. The Virtual Vet consultations for minor issues are essentially $30-50 instead of $80-150 for in-person visits, reduce stress for anxious pets, and provide 24/7 access to professional veterinary advice.
In fact, the leading Pet Insurance providers are now bundling telemedicine as a standard benefit. This essentially serves dual purposes, such as offering immediate value even in years when no major health issues occur, and it essentially triages the cases efficiently- routing the true emergencies to in-person care while also resolving the minor concerns remotely.
Embedded Insurance and Seamless Distribution
This is one of the most transformative technologies, and when integrated with Pet insurance, it is significantly helping the adoption of Pet Insurance. Some of the examples include- when adopting a dog from a shelter; insurance is offered as a checkbox at adoption, with the first month free. In another instance, when purchasing a breeder dog, insurance is included for the first year as part of the puppy package.
A real-world example of it can be seen in Zhibao’s technology expansion through its Chong Bao Bao platform by integrating AI-driven solutions to provide flexible coverage and enhance customer engagement through embedded models. This significantly lowers the customer acquisition costs for carriers while removing friction from the purchase decision for Pet owners.
Parameters for Pet Insurance Adoption in 2025
Here are the top factors to consider for Pet insurance adoption in 2025:
Claims Processing Speed
The time taken for claims processing is a significant factor that customers consider before opting for Pet Insurance- Do you wait weeks for reimbursement or receive funds instantly?
Mobile app Experience
One of the most important factors that policyholders check today is whether they can file claims over smartphones.
Wearable Technology
A key question that the customer asks is whether the insurer supports smart collar data.
Dynamic Coverage
Personalization is becoming a non-negotiable factor with customers’ concern about whether the policy can adapt as the pet ages or the circumstances change.
What’s Ahead?
The revolution in the Pet Insurance industry is already shaping the reality of insurance today. Technology has solved problems that kept the industry small and has also made the value proposition that drives explosive growth. However, the only question that lies here is how quickly the rest of the market catches up to what the leaders have already built.
Archismita Mukherjee
Insurance Content Analyst
