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Is Pet Insurance Worth It?

Many American families will tell you that there's nothing like the companionship of a furry friend. In fact, about 67% of American households own a pet, according to a survey by the American Pet Products Association.

In 2018, those same families spent over $72.5 billion on pet-related expenses - with about 25% of that spending going towards veterinary health care costs.

With this in mind, you may be curious about pet insurance and if it'll help curb your pet's health care costs.

Like our own health insurance plans, pet insurance can cover emergency care and illnesses, but it also varies from our coverage in some important ways. That's why it's important to understand the ins and outs of getting pet insurance, including what it covers.

What is pet insurance?

Simply put, pet insurance is healthcare coverage for pets. While the vast majority of pet insurance policies cover cats and dogs, only a handful of insurance providers offer coverage for "exotic pets" like fish, birds, amphibians, hamsters, snakes, or potbellied pigs.

There are a few different types of pet insurance plans on the market, including:

  • Accident-only coverage: Provides reimbursement for veterinary care for accidental injuries. This comes in handy if your dog eats a foreign object or gets hurt while romping around in the yard.

  • Accident and illness coverage: Covers accidental injuries and illnesses like cancer, digestive problems, or infections.

  • Accident and illness coverage with wellness: Covers the same vet services as an accident and illness plan plus preventative care treatments, cremation and burial, and dental care.

  • Riders: Think of these like add-ons. Riders cover specific medical services that aren’t covered under the general pet insurance policy.

Pet insurance policies rarely cover pre-existing conditions like medical problems related to genetic issues or a previous injury. Spaying and neutering also aren't included in most basic plans, but you can usually add them to the policy through a rider or wellness upgrade.

Owners of elderly pets should note that many policies require pets to be under a certain age to qualify for coverage.

How is pet insurance different than people insurance?

Like insurance for people, pet insurance policies can be customized to meet your needs of you and your fur baby. And most plans have insurance terms you may already be familiar with:

  • Monthly premium: The amount you'll pay for the policy every month.

  • Policy maximum: The maximum amount the policy will cover. After that, you're responsible for any further medical costs.

  • Copay: The amount that you'll pay out-of-pocket for some services or treatments received.

  • Deductible: The amount of medical fees you'll cover out-of-pocket before policy coverage kicks in.

But unlike health care insurance for people, there are rarely "in-network" or "out-of-network" vets or clinics. This means you can choose your vet and not be limited by network restrictions. Also, pet insurance almost always requires the pet owner to pay for any services received upfront. Meanwhile, a doctor or hospital usually bills your insurer under your "human" insurance plan and asks for payment later.

How much does pet insurance cost?

Pet insurance policies are much more affordable than typical health insurance plans for people. Most pet insurance policyholders spend between $15 - $100 in monthly premiums for policies worth more than $10,000 in medical services.

The cost of a basic pet insurance policy is calculated according to the following characteristics:

  • Species: Most policies cost more for dogs than cats, especially male dogs.

  • Breed: Purebreds cost more to insure because of the higher prevalence of genetic defects. Bigger breeds also cost more to cover because of their lower life expectancies and higher rates of illness.

  • Age: Older pets cost more to insure than younger pets. Newborn pets cost the least.

  • Residence: Location matters. Pets living in densely populated areas usually cost more to cover than pets in rural areas.

Vet bills can get quite costly if your pet gets seriously ill. For example, radiation therapy for cancer in a dog or cat can easily cost between $5,000 - $10,000, while surgeries generally cost at least $3,000. Pets who are on regular medications will also be a little more expensive (prescription coverage varies from policy to policy).

But pet insurance can be a lifesaver if you're confronted with the difficult choice of paying for expensive medical care or putting your pet down. In these types of worst case scenarios, pet insurance can make the difference.

Let's say you have 5-year-old mixed-breed dog named Spot: You have a pet insurance policy that has a $100 deductible and maxes out at $10,000. And, the insurance company will reimburse you for 80% of the costs for medical services after you pay your deductible. (Generally, when you visit the veterinarian, you’ll pay for services at that time and submit a claim for reimbursement, typically within a few days of claim approval).

One sunny afternoon, Spot accidentally eats something poisonous in your yard. Looks like Spot needs an emergency visit to the vet costs $2,000 in medical services. In this situation, you'd cover the first $100 (deductible) of the bill. Your insurance company would then cover 80% of the remaining $1,900 of the bill, leaving you to pay $380 out-of-pocket.

But if you didn't have pet insurance, you would've paid $2,000 out of your own pocket. Woof.

Who should buy pet insurance?

People tend to buy pet insurance to remain financially secure in unexpected situations. While it's a great option for many, it may not be worth the investment for others. For example, if you have a young, healthy pet, it may cost more to insure your furry friend than it would to pay vet bills out of pocket each year. But if you've had an experience where your pet has been unexpectedly injured without pet insurance, you know how much your wallet can take a hit from surprise vet bills.

The decision ultimately comes down to the health of your pet and your budget.

What should you consider before buying pet insurance?

Before you decide to invest in a pet insurance policy, find and compare pet insurance plans available in your area. Many insurance providers across the U.S. offer different types of pet insurance coverage, but each policy is unique and needs to be considered from multiple points of view. To make sure you get the policy that works for you, try to keep in mind a few important questions that can help you identify the right insurance plan:

Do you need a comprehensive pet insurance plan or a health discount plan?

Each has its pros and cons depending on the demographics of your furry friend. Health plans are more comprehensive, but discount plans are usually more affordable, offering a small discount on some medical services provided by specific providers. Discount plans can often be purchased online and don't require a monthly premium, but they don't reimburse pet owners for the money they spend on health care.

What are the policy’s monthly premiums, copays, deductibles and additional fees?

Reading the fine print and understanding how much the pet insurance policy really costs will make a big difference in the end.

Does the policy include illness or incident caps?

Many pet insurance policies will cap how much they pay for a single incident or illness. Make sure your policy has a maximum payout that is enough to cover any of your pet's potentially necessary medical procedures or problems.

What health issues are covered by the pet care policy you are considering?

Remember, not all plans are created equally. Make sure the policy you're considering will cover the health services that are most important to you and your pet.

Are prescription medications covered under the policy?

Most pet insurance policies do not include prescription medication coverage. Be sure to find a policy that includes a prescription coverage rider, if this is important to you.

Can genetic or pre-existing conditions be treated under the pet insurance plan?

Find a policy that covers these situations if your pet has a pre-existing condition or genetic disorder.

Are you getting a good deal?

The only way to know if you're getting a good deal on your pet insurance policy is to compare similar plans available in your area. Don’t just sign up for the first decent policy you see.

Get a pet insurance plan quote

If you think pet insurance is worth it, you can get pet insurance quotes for plans in your area. See your plan options with no obligation and discover the ways you can protect your furry friend (and your wallet).

Get a Free Quote

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