In 2007, there were about 72 million pet dogs and nearly 82 million pet cats in the U.S., according to the AVMA, but only 850,000 pet insurance policies, an industry panel estimates. However, advancements in care have driven costs higher, leading more owners to consider pet health insurance, payment plans and discount drug retailers. "Pet owners demand a higher level of quality for their pets. That all costs money," said Dr. Lawrence Gerson. The average family spent $655 on routine dog care last year.