Pet insurance premiums rise because a premium is priced to the cost of the claims it will pay, and the veterinary bills those claims reimburse keep getting more expensive while the insured book of pets gets older. The US dog accident-and-illness average rose from $640.04 in 2022 to $749.29 in 2024, about 17%, far ahead of general inflation, and the cited reason is cost arithmetic, not carrier opportunism [NAPHIA State of the Industry, Average Premiums, 2024]. This page explains the drivers using cost and actuarial data only, with no veterinary or treatment content.
What the data shows
Two cited series move together, which is the core of the explanation. NAPHIA's US dog accident-and-illness premium rose $640.04 to $675.61 to $749.29 across 2022 to 2024 [NAPHIA State of the Industry, Average Premiums, 2024]. Over the same window, AVMA's owner survey reported the average cost of the last veterinary visit rising to $200 in 2025 from $147 in 2024, with total annual pet spending up roughly $200 to about $1,700 in 2025 [AVMA: Evolving pet owner economics: What data reveal for veterinary teams, 2025]. When the bill a policy reimburses costs more, the premium that funds the reimbursement has to rise or the carrier's book loses money on every renewal.
The cat line is the control case that proves the mechanism. The cat accident-and-illness average stayed in a $383 to $387 band across all three years while the dog line climbed steeply [NAPHIA: Pet Health Insurance Industry Continued Exceptional Growth Rate In 2023, 2024-04]. If premium increases were uniform carrier behavior, both lines would move; the fact that only the line with the heavy high-cost claim exposure rose is consistent with claims cost, not pricing strategy, being the driver.
The main cost drivers
There are three, and they compound. The first is veterinary procedure cost. The large claims that move a book's average are expensive and have not gotten cheaper: a cruciate-ligament repair averages $3,525 and reaches $6,417 by region, an intestinal-blockage surgery averages $4,383 and ranges to $7,976, and a cancer course runs $3,000 to $10,000 or more over several months [CareCredit: How Much Does CCL (ACL) Surgery for Dogs Cost?, 2025] [CareCredit: Intestinal Blockage Surgery Cost for Dogs and Cats, 2025]. A carrier reimbursing 80% or 90% of bills in those ranges has to price the premium to the expected value of those payouts, so when the procedure cost rises the premium tracks it directly.
The second driver is claims frequency and the aging of the insured book. As a carrier's enrolled pets get older, the probability and severity of a claim rise with them, so even with the rate schedule held flat the average paid claim climbs as the book matures, and renewal premiums rise to match. AVMA's data showing visit cost and total spend rising year over year is the population-level signal of this; the book a carrier insures ages along the same curve. The fast market growth documented on pet insurance industry growth feeds this: a book that enrolled large numbers of younger pets in recent high-growth years ages into higher-claim bands together.
The third driver is partial reimbursement not relieving the pressure. A carrier does not lower the premium because policyholders are reimbursed less than they expected; Consumer Reports' survey of 3,583 policyholders found 44% received full reimbursement at their policy level after the copay on their most recent claims, with a median CR-member premium of $34.50 a month [Brian Vines, Consumer Reports Pet Insurance Buying Guide, 2026]. The premium is set to the carrier's expected payout, and carve-outs and caps reduce what the carrier pays without reducing what it charges, so the rising-cost pressure passes through to the premium intact.
A premium funds expected claims. If a dog book's exposure includes events like a $3,525 average cruciate repair reimbursed at 80%, the carrier's expected payout per such event is roughly $2,800 before the deductible [CareCredit: How Much Does CCL (ACL) Surgery for Dogs Cost?, 2025]. If procedure costs and claim frequency both rise as the book ages, expected payout per pet rises, and the dog accident-and-illness average moving $640 to $749 over two years is that arithmetic showing up at renewal [NAPHIA State of the Industry, Average Premiums, 2024]. The flat cat line, with lower large-claim exposure, did not need to move.
What it means for you
For a renewing buyer, the practical read is that a premium increase is mostly explained by factors outside your control and outside your carrier's discretion: the cost of the procedures the policy reimburses, and your pet getting a year older. That does not make every increase reasonable, but it reframes the question. Benchmark your dog increase against the roughly 8% to 11% market move documented on average pet insurance premium by year; an increase near that band is the cost trend passing through, while one well above it, on a pet that has not aged into a new band or filed claims, is worth asking your carrier to explain.
For a prospective buyer, the cost-driver picture argues for two cost moves, both of which are decisions about money, not medicine. Enrolling a young, asymptomatic pet locks in the lowest age band before the aging driver pushes the premium up and before any condition becomes a pre-existing exclusion. And choosing the deductible and reimbursement structure deliberately matters more as premiums rise, because you are paying more for the same reimbursement risk, so the term that decides whether a claim pays out is worth more scrutiny, not less. Which terms those are is the framework in the guides hub, including is pet insurance worth it. For the inflation comparison see pet insurance vs inflation; the full tracking desk is at /news/ and the review method is at /methodology/. FurVerdict is an independent editorial site and is not a licensed insurance agent; verify current terms with the provider before purchasing.