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You come home to find your dog vomiting and listless. After rushing her to the vet, you learn that she swallowed one of your socks and needs emergency surgery — to the tune of several thousand dollars. Can you afford to pay that bill? If not, pet insurance might be worth considering.
Pet insurance helps cover the cost of medical care for your furry friend. It can reimburse you for expenses like cancer treatment, emergency care, prescription medications and surgery.
In some dire scenarios, pet insurance could save the life of an animal who would otherwise be euthanized if its owner couldn’t afford pricey treatment. But if your pet rarely gets sick, you could end up paying thousands of dollars in premiums without getting much in return.
So is pet insurance worth it? Here’s some information to help you make the decision.
The rise of pet insurance
A growing number of owners are choosing to insure their pets. Nearly 4 million U.S. dogs and cats had pet insurance in 2021 — an increase of 28% from the year before, according to the North American Pet Health Insurance Association. The total number of insured cats and dogs in the U.S. has more than doubled since 2017.
That’s significant growth, but the industry still covers only a small fraction of American pets. In the U.S., there are 69 million households with dogs and 45 million households with cats, according to the American Pet Products Association.
» MORE: The best pet insurance companies
What pet insurance costs
The average annual cost for an accident and illness policy is about $584 for dogs and $343 for cats, according to NAPHIA. That works out to approximately $49 a month for dogs and $29 a month for cats.
If you choose an accident-only policy, the annual cost drops to $239 for dogs and $130 for cats. Such plans will cover treatment if your pet is hit by a car or swallows something poisonous, for example, but won’t pay out if he gets sick.
Premiums may vary significantly based on your pet’s age and breed, the cost of veterinary care where you live and the insurance policy you choose.
Be aware that rates tend to increase as your pet gets older and more prone to health issues. Unfortunately, if the plan gets too expensive for your budget, you might end up canceling the coverage just when your pet is starting to need it most.
To see how much rates might rise over time, we checked sample quotes from insurer Pets Best for a Labrador retriever living in Brooklyn, New York. Here are the monthly prices we found for a policy with a $5,000 annual limit, $500 deductible and 80% reimbursement level:
That may not seem too dramatic when you see the increases on a monthly basis, but here’s how your average annual premium would change over 12 years of your dog’s life:
We also got quotes from Pets Best for a domestic shorthair cat in the same ZIP code. (Rates run through age 14 to reflect a cat’s longer expected life span.)
While the overall premiums are lower for cats, there’s a similarly sharp price increase as they age.
In the end, you’ll likely pay thousands of dollars for insurance if you maintain the policy over the life of your pet.
Keep in mind that these are sample numbers for one pet insurance company in one ZIP code. Your own price will vary, so it’s worth shopping around.
What pet insurance pays for
So what do all those premiums get you? While insurance can be a godsend if your pet is facing an expensive diagnosis, your plan likely won’t reimburse every dollar you spend at the vet.
Deductibles, limits and payouts
Most policies come with an annual deductible, the amount you’re responsible for before the insurer starts paying. Once you’ve met your deductible, most plans pay out a certain percentage of your vet bill — typically 70%, 80% or 90%. And you may also be subject to an annual maximum payout.
Say you have a $500 deductible on a plan that pays up to $10,000 per year and reimburses 80% of your costs. If your dog needs a $2,000 surgery and you haven’t put anything toward the deductible yet, your plan would pay $1,200. Here’s the math:
$2,000 - $500 deductible = $1,500. 80% of $1,500 = $1,200.
You can often customize your plan with a lower deductible or higher reimbursement rate, but your premium will go up accordingly.
What’s covered and what’s not
Even if you find a plan with no annual limit and 100% reimbursement, it still might not pay you back for every veterinary expense.
For example, most plans won’t cover spay or neuter surgery unless you’ve purchased an add-on for wellness and preventive care. The same goes for vaccinations, annual checkups and teeth cleaning. That’s because insurance is designed to cover unexpected expenses, not routine costs associated with pet ownership.
But pre-existing conditions are perhaps the most important exclusion in just about every pet insurance plan. Pet insurance generally covers only new injuries or illnesses, not conditions the animal has before the policy takes effect. So don’t try buying pet insurance to pay for your cat’s chemotherapy after he’s diagnosed with cancer — it probably won’t be covered.
That’s why pet insurance may be more valuable for pets who are young and healthy than those who already have a chronic condition or two.
Pre-existing conditions can also be a problem if you let your policy lapse. Say you’re out of work for a few months and can’t pay Fluffy’s premiums. If you reinstate her coverage later on, all her previous ailments will count as pre-existing conditions, even those covered by the earlier plan.
For more details on what’s covered and what’s not, see our guide to pet insurance coverage.
The cost of veterinary care
Dog owners spend an average of $458 each year on surgical vet visits and $242 each year on routine vet visits, according to a recent survey by APPA. Cat owners have lower annual expenses on average, spending $201 on surgical vet visits and $178 on routine vet visits. (Remember: Most pet insurance plans don’t cover routine care unless you pay extra.)
Below are the most common types of pet insurance claims for dogs and cats, according to NAPHIA.
1. Urinary tract infection.
1. Urinary tract infection.
2. Otitis/ear infection.
4. Kidney disease.
5. Dermatology/skin conditions (allergies, irritation, infections, mass).
8. Upper respiratory infection.
11. Ophthalmology/eye conditions.
11. Inflammatory bowel disease.
Source: NAPHIA 2021 State of the Industry Report
Some conditions on this list are relatively minor and inexpensive to treat, such as a urinary tract infection resolved with a course of antibiotics. But others could rack up significantly more expenses.
For example, one common skin mass in dogs is a mast cell tumor, a type of cancer. Surgery to remove one of these tumors could cost anywhere from $500 to more than $1,000. For tumors that are aggressive or hard to remove surgically, your vet may also recommend radiation or chemotherapy, which can cost thousands of dollars.
If your pet faces only minor health conditions throughout his life, you may end up paying far more for pet insurance than you get back. But if something serious goes wrong, the insurance may be well worth it.
Alternatives to pet insurance
If you’d rather not buy pet insurance, you can try one of the following ways to pay for your furry pal’s care.
Instead of paying a monthly premium to a pet insurance company, you could contribute to a high-yield savings account for future vet expenses.
The advantage of this strategy is that if your pet stays healthy, you’ll still have the money to use for something else down the road. The downside is that you might not have enough saved up if your puppy has an expensive accident three months after you bring her home.
If you find yourself unable to afford care for your pet, you still have options. Your vet may be willing to work with you on a payment plan, or you can look for another clinic that charges less for the treatment your pet needs.
You can set up a crowdfunding campaign to help pool the support of friends and family. Charitable organizations may also be able to provide grants or other assistance. The Humane Society has a useful list of resources.
So, is pet insurance worth it?
Consider buying pet insurance if:
Your pet is young and healthy.
You don’t have enough savings to cover a hefty vet bill.
Having insurance coverage gives you peace of mind.
Pet insurance may not be worth it if:
Your pet is a senior or already has health problems.
A big vet bill wouldn’t be a financial hardship for you.
You’d rather take the risk of an expensive diagnosis than pay for insurance you might never use.