Is Pet Insurance Worth It?

Pets are more than just animals; they’re our beloved family members. And like any other family member, you want to ensure they stay healthy. Pet insurance is a great way to do this.

But many pet owners wonder if pet insurance is worth the cost. With 3.45 million pets in the US and Canada covered by this health insurance, it is certainly a popular purchase. However, there seems to be a universal lack of understanding of pet insurance and what it covers.

As a veteran of the insurance industry, and a pet owner myself, I understand there is a balance between having adequate coverage and being “insurance poor.” When is pet insurance worth it and when should you skip it? In this article, I will break down everything you need to know so you can make an informed decision.

Routine veterinary care costs about $200-$500 annually on average. Over the typical lifespan of a dog or cat, this can add up to $2,400-$6,000 or more in medical bills for a healthy animal. These costs can be significantly higher if your furry friend has any medical issues.

Without pet insurance, all medical costs are paid completely out of your pocket. However, many pet insurance policies will reimburse you up to a certain percentage for unforeseen health concerns, which can save you money over some time.

What Is Pet Insurance & How Does It Work?

Pet insurance is essentially a health insurance plan for your pets. It helps to cover certain medical expenses such as surgeries, medications, and emergency care. The cost and coverage options of each policy can vary by company, so it’s worth shopping around to see which plan may be right for you.

When Is Pet Insurance Worth It?

Although it may seem counterintuitive, pet insurance is a great option for those with younger, healthy pets. This is because insurance premiums tend to be higher for older pets with more health issues. In some cases, the carrier may not offer a policy at all.

However, the age and health of your pet is not the only factor you should consider when determining whether pet insurance is worth purchasing. You need to also determine how prone they may be to certain illnesses or injuries. Most importantly, you need to consider how much you can realistically afford to pay out of pocket if an unexpected scenario arises as well.

According to the North American Pet Health Insurance Association, the most common type of pet insurance claims for both dogs and cats are urinary tract infections. Pumpkin Pet Insurance estimates the average cost of treating a UTI in dogs to be about $274, including the cost of antibiotics. However, this amount can be substantially higher if the UTI is caused by some underlying condition that needs treatment or if it develops into something more serious.

If you have the financial means to afford these types of scenarios, then you may be able to pass on pet insurance. But if your beloved pet is severely injured or gets sick and you don’t where you would get the funds to treat them, a pet insurance policy may be the best way to go.

Note: Not all pet insurance policies are created equal. Many different coverage and pricing options are available depending on the company and the type of animal you have. Get quotes from a few different companies to compare.

What Is Covered By Pet Insurance?

While some pet insurance policies offer more coverage options than others, all policies provide the same general coverage. Here are some of the most common coverages.

Wellness

Typically offered as an add-on to an accident and illness policy, wellness coverage helps to pay for some of the more common pet expenses such as:

• Spay or neutering
• Flea and heartworm prevention
• Vaccines
• Bloodwork
• Routine checkups

Accident and Illness

Accident and illness coverage is the most common pet insurance plan. It pays for certain accidents and illnesses up to your selected policy limit. Some of the following types of scenarios it would cover are:

• Urinary tract infections
• Bug bites
• Car accidents
• Broken bones
• Cancer
• Diabetes
• Ear infections
• Heart disease

Accident Only

As the name suggests, Accident Only policies provide coverage for accidental events, such as car accidents or bee stings. The price of these policies is often less than an Accident and Illness policy since the coverage is less broad. But they are a good option for those who want minimal coverage.

Levels of Coverage

Much like any other insurance policy, there are certain coverage limits one can choose from. Typically, these limits are a fixed amount such as $2,500, $5,000, or $10,000 per year. Some plans may offer unlimited coverage in a given year, but the cost of the policy can be significantly higher.

Typical Coverage Conditions

Many pet insurance policies have certain conditions one must meet before coverage kicks in. One of the most common conditions is a waiting period. A waiting period of a few days to two weeks prevents customers from being able to get reimbursement for any accidents or illnesses that may occur.

Another common condition is annual deductibles. Unlike a car or home insurance deductible where it’s applied per occurrence, pet insurance deductibles typically only need to be met once a year. So once you meet your deductible for the year, you are set until the next policy term.

Reimbursement Model

Pet insurance policies may also follow a reimbursement model, where you are reimbursed up to a certain percentage. Typically, you select the percentage you would like to be reimbursed and that is what the company would cover after any applicable deductibles are met. Reimbursement percentages range between 70% to 90%.

Death by Illness or Injury

Saying goodbye to your fur baby is undeniably one of the hardest parts of pet ownership. Worrying about how you’re going to pay for it shouldn’t be an added stressor. That is why many pet insurance plans offer coverage for the associated costs such as euthanasia, cremation, or burial.

Loss or Theft

The American Kennel Club estimates that as many as 2 million dogs are stolen each year in the United States. At such a high number, many pet insurance companies are starting to offer coverage for the value of your pet if they are stolen or lost. Some also offer reimbursement for advertising or reward expenses for pets that wander away.

Liability Coverage

While some policies may provide liability coverage, it’s not primarily something pet insurers cover. This is because liability is offered through your homeowners or renter’s policies. Regardless of who is providing it, liability protects you if your pet causes any bodily injury or property damage to another.

Cattery and Kennel Fees

Some pet insurance policies will provide coverage for your pet to be boarded in a cattery or kennel for certain situations. Some of the covered scenarios are as follows:

• Emergency evacuation
• Emergency travel
• Illness or injury
• Owner hospitalization

All pet policies specifically exclude boarding for recreation or planned vacations.

Treatments Abroad

Not all carriers offer coverage for pets requiring veterinary services abroad, but some do. These policies will usually cover the same services abroad that would be covered in your country of origin. The difference is that the medical records may need to be translated and the costs would be converted into the appropriate currency.

What Is Not Covered by Pet Insurance?

Insurance policies are unable to provide coverage for every scenario, as that wouldn’t be realistic or profitable for the company.  Pet insurance is no exception. While exclusions may vary by company, here are some of the more popular situations not covered by pet insurance.

Pre-Existing Conditions

A pre-existing condition is any accident or illness that occurred prior to your pet insurance policy going into effect. For example, suppose your cat was diagnosed with allergies right after you adopted them. If you purchase pet insurance after this diagnosis, anything related to these allergies would most likely not be covered under the policy.

Grooming and Boarding Services

Grooming and boarding services (outside of an emergent need) are almost always excluded from pet insurance policies. This is because both are considered part of the routine expenses of caring for an animal. Both grooming and boarding expenses should be taken into consideration when you are determining the overall cost of ownership.

Treatment for Parasites

Some examples of parasites that can affect both dogs and cats are heartworms, ringworms, fleas, and ticks. Preventive measures like medication or special collars are part of the normal expenses of animal ownership and generally aren’t covered by pet insurance. Similarly, if your pet is diagnosed with a parasite, the treatment for this would be your responsibility as well.

Elective Procedures

Elective procedures such as tail docking, ear clipping, anal gland expression, microchipping, or declawing are not covered by most pet insurance policies. If they are not deemed to be medically necessary, you would be responsible for paying for these procedures out of pocket.

Breeding and Pregnancy Services

Almost all pet insurance policies will exclude breeding and pregnancy services. This includes any complications that can result from your animal’s pregnancy. If you choose to breed your pet, some companies offer dog breeding coverage.

Pet Insurance Deductibles, Limits, and Payouts

As with many other types of insurance policies, pet insurance offers a limit of coverage you can select, along with deductibles and the type of payout. Most pet insurance plans are set up on a reimbursement payout. This means that you are reimbursed up to a certain percentage for veterinary services, subject to an annual deductible.

Suppose for example, you have an insurance plan that reimburses you up to 90% for medical expenses, with a $500 deductible and an annual maximum payout of $5,000. If your pet has a covered medical emergency that costs $3,000 (assuming this is the first claim of the year), you would be subjected to your $500 deductible, leaving $2,500 owed. 90% of this amount would be paid by the insurance company ($2,250) and you would owe the difference. You would then have a remaining $2,750 in reimbursement for the rest of your policy term.

What Are the Benefits of Pet Insurance?

Although it is not legally required to purchase, there are many reasons to carry pet insurance. Here are some of the most common benefits of purchasing.

Long-Term Savings

By purchasing a pet insurance policy, owners can save money on medical expenses. The lifetime cost of owning a dog is between $20,000-$50,000, and owning a cat is between $12,000-$26,000. With a percentage of medical expenses being covered by your pet insurer, owners can see significant savings over the years.

Coverage for All Pet Types

Despite being more common for dogs and cats, pet insurance may actually cover other types of animals as well. Some pet insurers also provide coverage for rabbits, guinea pigs, ferrets, birds, reptiles, and other exotic animals. All pet owners can benefit from this affordable and worthwhile coverage!

Multi-Pet Discounts

Pet owners who have more than one fur baby are able to take advantage of multi-pet discounts with insurers. This ensures that all your animals are protected without the hassle of having multiple policies or paying twice the amount.

Swap Vets Anytime

You are also not tied to any one specific veterinarian with pet insurance. Customers are able to switch veterinarians or practices anytime without disruption to their coverage. This can benefit those who move frequently, such as military families.

What Are the Risks & Disadvantages of Pet Insurance?

There are also some inherent risks with pet insurance. Although the benefits usually outweigh the risks, here are some of the more common ones to be aware of.

Limitations of Coverage

As mentioned previously, pet insurance cannot cover every instance. There are some limitations, such as pre-existing conditions, boarding and grooming, and pregnancy complications. Also, depending on what type of coverage plan you choose, you may not have coverage for routine veterinary visits.

Price

While basic coverage can be pretty affordable in most situations, it’s still an extra expense every month. Depending on the breed and overall health of your pet, the price of a policy can be a lot higher. Even if the cost is affordable now, the premium generally increases as your pet gets older, which adds to the extra cost.

The Costs of Vet Bills Without Pet Insurance

One of the biggest considerations one must make when determining whether to purchase pet insurance is the general cost of vet bills. Without pet insurance, you would be responsible for paying the entire amount yourself.

How Much Do Vet Bills Cost?

The average cost of vet bills will depend on the type of visit, diagnosis, and treatment, in addition to the type of animal being treated and where you are located. Here is a list of some of the most common treatments and what you can typically expect to pay.

How Much Common Pet Emergencies Can Cost You?

Depending on the type of emergency, the cost of the treatment will vary. Severe trauma, such as getting hit by a car or blunt force trauma is the most expensive pet emergency. Some of the other common emergency scenarios and their costs are listed below.

Dogs

Cats

Average Veterinary Fee Cost for Cats & Dogs

It may seem obvious why an emergency visit to the vet is more costly than a routine checkup. But even those checkups have various fees. Here is a breakdown of some of the more common fees and their costs.

How Pet Emergencies Can Lead to Long-Term Expenses?

It is estimated that  1 in 3 pets will need emergency veterinary treatment each year. While it may seem tempting to avoid putting off taking your pet to the vet for an emergency visit due to the cost, chances are you won’t be able to avoid it, and you shouldn’t. Prolonging your pet’s suffering is not only cruel but can also lead to long-term expenses.

A UTI, for example, is a relatively common ailment that can be found in both cats and dogs. If you don’t treat it soon after symptoms start, it can spread to the kidneys, causing further complications or even kidney failure. Once this occurs, your animal may then require medications, IV fluids, supplements, or surgery to manage, all of which have an associated cost.

Even if you are on top of your pet’s health and taking them to the vet as often as needed, one emergency visit can be financially devastating. While there are financing options available, the interest rates can have you paying a vet bill for longer. Pet insurance is a way to ease this burden.

What Are The Costs Of Pet Insurance?

The cost of insuring your furry friend can vary, depending on the type of plan you choose, the company, and where you’re located. The specific variables that can affect the price are outlined below.

Factors That Affect Your Pet Insurance Premiums

Many different factors affect pet insurance premiums. These are some of the most common:

• Breed- The breed of your animal will impact the price you will pay for pet insurance because certain breeds have different health concerns. For example, English and French bulldogs are prone to respiratory issues due to the shape of their face and their features. Larger breeds, such as German Shepherds often have hereditary conditions such as hip dysplasia.
• Type of Pet- A cat is often less expensive to insure than a dog because they are smaller and they don’t require as much care. Also, when dogs do require care, it tends to be more costly. The same can be said for smaller animals such as bunnies or guinea pigs.
• Location- As with any other insurance policy, where you live also plays a part in how much you will pay for pet insurance. This is because the cost of veterinary care varies by state.  According to our research, pet insurance for dogs in Colorado, Indiana, and Ohio will cost you $48.81 whereas pet insurance for dogs in Michigan can range between $27 and $50.
• Age- The age of your pet will also impact the price of your insurance policy. This is because the older your pet is, the more care it often needs.

How Does Age Affect Pet Insurance?

The age of your pet is one of the most significant factors in your insurance price. As animals get older, they tend to experience more health issues and require more veterinary care. Therefore, the price of insurance increases.

Since the cost of insurance is lower when your pet is younger, it is advised to obtain insurance sooner rather than later. However, according to my research, the price difference between getting insurance for a baby and a 5-year-old is essentially non-existent. Once your pet is over 5 years old, you will start to see the cost of insurance increase.

Comparing Coverage and Cost

One of the best ways to determine whether pet insurance is worth purchasing is by comparing the cost of insurance coverage and what specific veterinary services would cost out of pocket.

Wellness Coverage vs. Wellness Cost

Wellness coverage is often offered as an add-on to an Accident Only or Accident and Illness pet insurance policy. These companies will typically have an annual reimbursement limit for each specified service. Depending on the company, wellness plans average about $26 a month for dogs and about $24 a month for cats.

Accident-Only Coverage vs. Accident Cost

Accident-only coverage is typically the least expensive option for pet insurance. This is because it only provides coverage for accidents such as broken bones, or swallowing of a foreign object, and broken bones. The following are examples of common treatments for accidents and their associated cost, as well as what insurance would cover, assuming a 70% reimbursement.

Accident and Illness Coverage vs. Accident/Illness Cost

Accident and Illness coverage reimburses you for any accidents that your pet is involved in, as well as illnesses. Reimbursement percentages are usually offered at 70%, 80% or 90%. Here are the costs of common illnesses and the cost of treatment as compared to the covered cost by your pet insurer, assuming a 70% reimbursement percentage.

Note: Many medications that pets are prescribed can be found for cheaper at different pharmacies. Don’t be afraid to shop around to find the best price. GoodRx is a good resource too!

Do All Vets Take Pet Insurance?

Because many pet insurance plans reimburse you directly for medical expenses, you can choose any licensed veterinarian or animal hospital you’d like. Unlike traditional medical insurance for humans, there aren’t any preferred providers or networks you need to be concerned with. Subsequently, you can use your pet insurance with whichever veterinary practice you choose!

The vast majority of Vets recommend carrying pet insurance because it allows customers to get the appropriate care for their pets. Especially in situations where they otherwise might not be able to. Pet insurance helps to relieve financial anxiety from medical decisions and provides peace of mind.

Who Should Consider Pet Insurance

While pet insurance is a great option for all pet owners, certain groups should definitely consider purchasing it.

Pet Parents With Young Pets

The price of pet insurance is based largely on the age of your pet. The older your pet is, the more expensive the premium usually is as well. Those with young pets can benefit from the cheaper premiums by purchasing the policy before their pet turns 5 years old.

Pet Parents With Accident-Prone Pets

The first pet I ever owned with my husband was an English Springer Spaniel named Peppy. She was appropriately named because she was very energetic as a puppy and would run and jump as most young dogs do. When she was about 5 years old, she tore her ACL, which required surgery.

Unfortunately for us, we didn’t have pet insurance and had to dip into our (meager at the time) savings to pay for the surgery. Had we been knowledgeable enough, we would have purchased accident insurance originally, especially for an accident-prone pet like Peppy. And we could have saved ourselves a few thousand dollars in the process.

Breeds Prone to Hereditary Issues

For pet parents who have breeds that are prone to hereditary issues, pet insurance is a lifesaver. Conditions such as hip dysplasia, cancer, respiratory issues, or allergies are all treatable and covered by most pet insurance plans.

Those Who Don’t Want Cost to Be a Deciding Factor

Pet insurance allows owners to have peace of mind that their pet’s future healthcare or quality of life won’t be impacted due to cost. Knowing that you can be partially reimbursed for a large bill allows you to make healthcare decisions without the weight of the price on your shoulders.

Pet Parents Who Want to Avoid Big Surprise Charges

Spending a few hundred dollars a year on insurance is often easier than coming up with a few thousand in an emergency. With pet insurance, you can budget a set amount each month to pay for the coverage, and not have to worry about a surprise charge if something happens to your pet’s health.

Those Without a Large Emergency Fund

Similar to my situation with Peppy, those without a large emergency fund would have to dip into their savings to pay for a medical emergency. If you aren’t in a financial position to pay a large, unexpected bill for your pet, pet insurance can help.

Who Might Not Want Pet Insurance

On the other hand, some individuals may want to skip purchasing pet insurance. Some of those groups are as follows.

Pet Parents With Uninsured Senior Pets

Maybe you adopted a senior dog, or you inherited one. Either way, since the cost will be higher, it may not be worth purchasing pet insurance. Rather, you might be better off putting some money aside every month into a savings account for when the need arises.

Pets With Existing Health Problems

Due to the pre-existing condition exclusion on the majority of pet insurance plans, pets that have existing health issues may not benefit much from pet insurance. Accident-only plans could be an option but you should weigh the cost and benefits.

Pet Parents Equipped to Weather Big Unexpected Expenses

If you can afford to handle large, unexpected bills, then you may want to skip purchasing pet insurance. Whatever money you would typically spend on pet insurance can be put aside and added to your emergency fund.

What Are The Alternatives to Pet Insurance?

If you decide to forego pet insurance, you aren’t completely without options. There are a few alternatives to purchasing a formal pet insurance plan. Here are some for your consideration.

Self-Funding

Self-funding is a fancy term meaning that you don’t purchase insurance and instead pay for everything out of pocket. Rather than paying an insurance premium every month, you could put aside that money in a bank account for emergency pet expenses. You should at least consider going this route if pet insurance isn’t for you.

Find Cheaper Plans

Remember that insurance is a competitive market. If one company is quoting you for coverage at a price higher than you’d like to pay, others may charge less. It doesn’t hurt to shop around.

In addition, you could also look at changing what you’re covered for. Accident-only plans are less expensive than Accident and Illness plans with a wellness add-on. Consider what scenarios are most concerning to you and how much the plans are to provide that coverage.

Payment Plans

If you don’t have the means to self-fund or to find less expensive pet insurance plans, you may be able to get a payment plan through your vet. Clinics and animal hospitals that are set up with companies like Scratchpay will allow customers to finance their bills, rather than go without the service.

Crowdfunding Campaigns

For more expensive health issues, you may choose to crowd-source funding from sites like GoFundMe. You can ask friends and family to help contribute to your cause and obtain the funds needed to pay for your pet’s medical bills. This may work well for those who are short on cash but have a large network they can reach.

Charitable Organizations

It is also worth looking into charity organizations for what services they may offer pet parents. Local animal shelters often sponsor low-cost spay/neuter clinics, for example. While organizations like The Pet Fund, Frankie’s Friends, or RedRover Relief give grants to those who can’t afford the care their pets need.

Pet Insurance or Savings Account?

As mentioned a few times, those who can’t purchase pet insurance, or choose not to, may opt to build a pet savings account instead. However, there are pros and cons to both. Here are some points you should consider.

With a savings account, you have the flexibility to add as much or as little money as you want. There are no claims forms that you need to fill out for reimbursement, and you can choose how you use the money. You can pay for routine expenses like grooming or leave it solely for emergencies.

On the other hand, you are in control of that money, which means you may be tempted to use it for other expenses. Also, it may take a while to save enough funds to use for an emergency. If your pet gets ill or injured before you have enough money saved, it may not be as useful.

Pet insurance, while it is a monthly expense, doesn’t make you pay a certain amount before you can be reimbursed. As long as your waiting period has been met, you can collect your reimbursement, even if you’ve only paid a month’s worth of premium. Pet insurance also gives you the freedom to stay on top of your pet’s health without worrying about the cost of treatment.

In addition to the fact that you have to pay the premium consistently, a downfall to pet insurance is that the price can change. In fact, the cost will most certainly increase as your pet gets older. You are also more likely to pay more in premiums than the insurer will pay out in benefits.

Are Pet Insurance Plans Worth the Expense?

So the big question is whether pet insurance plans are worth the expense. In my experience, pet insurance is worth every penny. The premium may be a few hundred dollars a year but the health of your pet is priceless.

However, not everyone is in a position to add an extra bill to their monthly expenses. Here is a good breakdown of what you would pay vs. collect in insurance benefits with pet insurance in various scenarios. All figures are based on an 80% reimbursement plan, with a $500 deductible and an annual coverage limit of $5,000.

Healthy Animal (No Major Accident or Illness)

Animal With Cancer (With Pet Insurance)

Animal With Cancer (Without Pet Insurance)