New report examines pet insurance's impact on US veterinary practices

Veterinary teams adjusted their recommended treatment plans an average of 5.1 times per week because of cost in 2026, up from 4.7 times in 2025, according to the third edition of the State of the Industry report released by Pawlicy Advisor and the American Animal Hospital Association (AAHA).

The report surveyed 451 veterinary professionals in May and June 2026, bringing cumulative participation to more than 1500 respondents across the 2023, 2025, and 2026 editions. Veterinarians and medical directors made up 40.6% of the sample, practice managers and administrators 39.5%, veterinary technicians 10.2%, client service representatives 3.2%, and non-veterinarian owners and other roles 6.5%. Independent hospitals accounted for 67.6% of responses and corporate practices for 29.1%. Findings were analyzed using rank-based statistical methods at a 95% confidence level.¹

The daily arithmetic

Weekly cost-driven adjustments to care were reported by 86.1% of respondents, up from 84.4% in 2025. The average practice made 5.1 such adjustments per week, up from 4.7. Difficult financial conversations with clients held steady in reach — 81.3% have them weekly — but rose in volume, from an average of 4 per week to 4.4.

New to the 2026 survey was a question about where, exactly, the wall goes up. The answer is lower than the profession might hope: 85% of respondents said clients begin declining recommended care at estimates of $1000 or less, and 47.3% put that threshold at $500 or less.

At the far end of that arithmetic sits the finding the report returns to most soberly. Respondents estimated that 13% of euthanasia decisions in their practices were driven by an owner's inability to pay — unchanged from 2025, and a figure nearly 1 in 4 respondents placed at 20% or higher.

What coverage changes

Positive differences between insured and uninsured patients were observed by 85.6% of respondents — better treatment compliance most often, at 73.0%, up from 68% in 2025, followed by better patient outcomes at 49.9% and less economic euthanasia at 35.2%, up from 30%. Agreement that insurance helps clients say yes to more care has held near 87% across all 3 editions.

The report also found a modest but statistically significant inverse relationship between a practice's insured share and how often its team adjusted care for cost — the second consecutive year that link has surfaced.

Tough conversations

Adoption, though, is still largely reactive. Just 48.2% of respondents said their practice recommends insurance proactively; the rest wait to be asked. Practices in the first group reported a median insured share of 7.5%, roughly double the 3.5% reported by those in the second (P < .001).

What holds teams back is less skepticism than logistics and liability. Difficulty with the conversation was reported by 69.6% of respondents, and the leading obstacle was simply time, at 27.7%. Recommending a single carrier made 79.3% uncomfortable — a well-founded instinct, given that only 1.4% hold the property and casualty license required to solicit coverage. Offered a range of alternatives, 60.5% pointed to a comparison marketplace staffed by licensed experts, against 6.8% who favored a single provider's brochure.

The report was produced by Pawlicy Advisor, a licensed pet insurance marketplace and brokerage recommended by AAHA, in partnership with AAHA.

Reference

1. Pawlicy Advisor, American Animal Hospital Association. State of the Industry: The Impact of Pet Insurance on U.S. Veterinary Practices. Pawlicy Advisor; 2026. Accessed September 1, 2026. https://cdn.pawlicy.com/documents/Pawlicy-AAHA-State-Of-The-Industry-Report-2026-The-Impact-of-Pet-Insurance-on-Veterinary-Practices.pdf