Pet Insurance: What’s the Big Woof?

Sleeping Dog - Pet Insurance

The numbers are in. We’re a nation of proud pet owners, and pet insurance is a topic of discussion. About 70% of Americans share life with one or more pets: the national average is 1.6 furry, fishy, or feathery creatures per household. And we don’t just like our pets. We love them like family. We spoil them with treats. We buy them squeaky toys, cat condos, and other amusements. Some pundits even tout that pets are the new kids—and data seems to back that up. A recent study by Rover reported that 22% of millennials and Gen Z members who own pets chose to wait to have a child and adopted a dog or cat instead. In many cases, it came down to finances: kids are expensive to raise.

Loving a pet means wanting to give him or her the best life possible—including good health. But veterinary care is expensive, too. That’s why, in recent years, pet parents are increasingly buying pet insurance policies for their four-legged friends. According to the Insurance Information Institute, the total number of pets insured in the U.S. at year-end 2021 was 3.9 million, representing a 28% increase since 2020.  

Pet insurance helps defray the cost of providing excellent medical care for our dogs and cats. In some cases, it can be life-saving. When pets fall gravely ill or have a severe accident, vet bills can easily climb into the multi-thousands of dollars. That’s money many pet owners don’t have in savings. Money magazine reports that more than a third of US pet owners say they couldn’t cover a pet emergency of more than $400 with cash. Too often, they’re forced to make the heartbreaking decision of euthanizing their beloved companions. 

That fact alone makes pet insurance merit the price for many pet lovers. But what about you? Is pet insurance worth it for you and your pet family? Let’s look at the coverage pet policies offer, how pet insurance works, and how much it costs to help you decide. 

What Does Pet Insurance Cover?

Pet insurance policies are usually broken down into two types of coverage: accident and illness. Most pet insurers allow you to customize your policies to include one, the other, or both types of coverage. Should your pet become ill or injured in an accident, pet policies typically cover a wide range of treatments:

  • Diagnostic procedures like x-rays, ultrasounds, and blood tests
  • Hospitalization
  • Emergency treatment
  • Prescription medicines
  • Cancer care
  • Treatment of hereditary and chronic conditions
  • Alternative care (acupuncture, hydrotherapy, etc.)
  • Behavioral therapy

Some pet insurers also offer wellness coverage. Wellness plans cover routine and preventive care that accident and illness coverage excludes. Wellness plans vary, but they may cover the costs of:

  • Wellness exam fees 
  • Vaccinations
  • Heartworm and other parasite testing
  • Micro-chipping
  • Flea and tick prevention
  • Deworming
  • Spay/neuter surgery
  • Dental cleanings

What Doesn’t Pet Insurance Cover?

To reiterate, accident and illness plans do not cover routine care. You’ll need a wellness plan for that. In addition, accident and illness plans don’t cover exam fees, which are part of pretty much any vet bill you receive. The average sick visit exam fee is between $45 and $65, depending on your location. Like most things you buy, veterinary services cost more in large, expensive cities.

Nearly all pet insurance plans exclude pre-existing conditions: that’s one way they differ from human health insurance plans. Not understanding the pre-existing condition clause in your pet insurance policy can lead to disappointment, so it’s critical to read the fine print. The key is to understand how your policy defines a pre-existing condition. Insurers classify pre-existing conditions as any condition your pet has been diagnosed with at the time of enrollment, regardless of whether he or she has been treated for it. But they do modify the definition. If your pet has not received treatment for an illness for a lengthy period—usually one year—the condition becomes eligible for coverage again. Your pet insurance company will request your pet’s veterinary record when you first sign up for coverage to verify whether a condition is pre-existing. 

How Much Does Pet Insurance Cost?

Your pet insurance premiums will vary based on several factors. Cat insurance costs less than dog insurance. Your pet’s age figures heavily in the cost of your policy. Insurance companies are in the business of managing risk. As your pet ages, he or she is more susceptible to illness, so older pets cost more to insure. Here’s some good news for owners of mixed-breed dogs: they are generally cheaper to insure than purebred dogs.

Pet policies come with coverage limits, deductibles, and co-pays like human health insurance policies. The higher your coverage limits and the lower your deductible, the more your policy will cost. In addition, most pet insurers allow you to customize your co-payment percentage, generally between 10% and 30%. The lower the co-pay you choose, the more expensive the policy.

Here are some national averages to give you an idea of what your policy might cost you. Let’s take a look at cats first. If you choose an accident and illness policy with a $5000 annual coverage limit, your monthly premiums will likely be around $28. You’ll pay around $50 monthly for a plan with unlimited benefits. The monthly premium for a $5000 plan for a dog is about $35 per month. If you step up to an unlimited benefits policy, you can expect to pay about $56 per month. Wellness coverage can add an additional $50 or so to your costs. Again, these prices are averages, and you may pay more or less depending on your pet’s age, breed, location, and health history.

Is Pet Insurance Worth It?

Sneaky Cat - Pet Insurance

Here’s the low down. If you’re fortunate enough to be financially able to cover vet bills totaling thousands of dollars without breaking a sweat, then pet insurance may not be for you. But it could still save you money. At $600 or so at the upper end of premium expenses for an accident/illness plan, it would only take one accident or tough-to-cure illness to offset the cost of a policy. 

Wellness plans may not be cost-effective for all pet owners. The $600 you pay for wellness coverage may exceed your annual costs for preventive care. But if your dog has periodontal issues and requires a teeth cleaning, for example, a wellness plan may be worth the expense. Because many pets need to be anesthetized for dental work, the cost of cleanings can be as high as $700.

We’ve talked about the ways pet insurance and human health insurance are alike and different from one another. But pet insurance is like every other kind of insurance in one way. No one likes to pay for it, and everyone hopes they’ll never have to use it. And when you do, you’re glad that the coverage is there. 

Pet policies differ regarding what types of medical incidents are covered, coverage limits,  deductibles, and co-pays. But hidden underneath all of those policy details, there’s one benefit all pet insurance policies offer—peace of mind. Knowing you can afford to give your pet the veterinary care he or she needs, even under some pretty dire circumstances? Many pet lovers would agree that it’s priceless. 

The good news is that pet insurers want to make their plans affordable and will work with you to find a plan that suits your budget. So whether you’ve just brought home a fluffy golden retriever puppy or trying to protect your senior Siamese, pet insurance is well worth exploring for your pet.

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Susan Doktor

Susan Doktor is a journalist, business strategist, and lifelong pet owner. She writes on a wide range of personal finance topics and has dozens of pet-related articles to her credit. Her contribution comes to us courtesy of 

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