Is Pet Insurance Worth the Cost?

People bring out their dogs, cats, and pets to be blessed at the Washington National Cathedral in Washington, D.C., on Oct. 3, 2021. Tasos Katopodis/Getty Images

Pets are big in America. Sixty-six percent of U.S. households own a pet. Many of these pet owners look at their pup or kitty as one of the family. While loving a pet is priceless, their medical bills aren’t. That’s why pet insurance is increasing in popularity.

Pet insurance was an unknown product for years. But in 2022, the number of pets insured rose to 5.3 million from 3.1 million in 2020. But what does this insurance cover? And is it worth the cost?

What Pet Insurance Costs

You can choose two types of insurance policies: an accident and illness policy or an accident-only policy. There’s a significant difference in pricing.

An average accident and illness policy for a dog will run around $640 per year. In contrast, an accident-only policy averages $200, according to the North American Pet Health Insurance Association (NAPHIA). A cat will cost $387 a year for accident and illness. But accident-only will cost $122.

Unfortunately, you won’t pay the same premium for your pet’s lifetime. Rates rise based on your pet’s age. For example, a two-year-old dog may pay $31.27 monthly, but a 12-year-old dog could pay as much as $134.49. These numbers are based on an annual $5,000 limit, $500 deductible, and 80 percent reimbursement level from Pets Best Insurance.

Cat insurance runs the same way. At two years, you'll pay $9.29; at 12 years, you can expect to pay $35.05 per month.

These are premium examples, and you might pay more based on your area of the country.

You could pay thousands of dollars over your pet’s lifetime. And with pet insurance, prices vary, so it pays to shop around.

What Does Pet Insurance Cover?

If you buy an accident and illness policy, some coverages included are:

• accidents (broken bones, some poisoning, car accident, lacerations, foreign object ingestion surgery)
• cancer treatments
• diagnostics
• prescription medications
• ongoing and chronic conditions (that happened after the policy was bought)
• emergency care, hospitalization, and surgery
• hereditary and congenital conditions
• euthanasia
• coverage while traveling
• curable conditions

But there isn’t one plan for all these coverages. Some plans don’t cover all of these, like hereditary and congenital conditions. Be aware of what’s excluded so you can avoid surprises.

What Doesn’t Pet Insurance Cost

Pre-existing conditions are not covered in most insurance plans. This is also true if you let your policy lapse and try to purchase it again when your pet becomes ill.

Most plans don’t cover spay or neuter surgery. But you can purchase an add-on to your policy at a price. Vaccinations, check-ups, and teeth cleaning are also not covered.

Diving Into Pet Insurance’s Fine Print

The devil is in the details, and when it comes to purchasing pet insurance, read the fine print. Many pet insurance policies will have specific conditions unique only to their company. For example, some policies are vague about toxin exposure.

It’s crucial to understand exclusions. For example, if you have an accident-only policy, a breed-specific condition or emergency care for an illness will not be covered. Elective surgeries or experimental treatments are also not covered.

Be aware of what your deductible is. It can be anywhere from zero dollars to $2,500. And pet insurance doesn’t pay the veterinarian directly. You'll need to front the money and then file a claim to the company for reimbursement.

Then depending on your policy, they pay you back anywhere from 20–100 percent. Remember the cap. Most pet insurance companies have an annual limit they'll pay.

When to Buy Pet Insurance

Purchasing pet insurance when your pet is young is advantageous. Young dogs tend to eat strange items, so there is the risk of surgery. Bloat is also possible in large dogs and will need veterinary care.

If you purchase a breed with known hereditary or congenital conditions, like hip dysplasia, you might want to invest in pet insurance. It could save you a large expense down the road.

Ensure you understand any distinct per-condition waiting periods that might apply to your pet’s illness.

And you might want to think twice about insuring older dogs. If your four-year-old dog contracts cancer, you might be willing to go the extra mile to save her.

But do you want to put a 14-year-old dog through cancer treatment? At that point, having pet insurance may not matter.

How to Buy Pet Insurance

Make sure you know how the premium increases as your pet ages. Ask for a quote at your pet’s current age and then ask for quotes that apply each year your pet ages.

Understand what’s covered. Some plans don’t cover the diagnostic or follow-up exams if your pet is injured or ill.

Don’t purchase add-ons for preventive and elective care. The premium cost over the years will be more than paying for the service out of pocket.

Cut your premium costs with accident-only policies. Some pet insurance companies don’t raise the premium based on age with accident-only policies.

Is Pet Insurance Necessary?

The cost of emergency care at a 24/7 hospital is higher than a regular veterinarian. So the thought of taking your pet to one scares your checkbook. But how often do pets actually end up going to a hospital or even having an emergency?

The average emergency vet bill is anywhere from $800–1,500 depending on location, diagnostic tests, time of day and treatment. And every six seconds, a pet owner’s emergency bill is around $1,000.

Although this sounds scary, out of roughly 185 million cats and dogs, you have only a 3 percent chance of your pet having an emergency.

Pet insurance may not be the best buy, especially since most pets only need preventive care.

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