If your beloved pet falls ill or gets injured, the last thing you want to worry about is the cost of their medical treatment. That’s where pet insurance comes in. In recent years, pet insurance has been gaining popularity, providing financial coverage for veterinary expenses. According to the “State of the Industry 2022” report published by the North American Pet Health Insurance Association, there are now nearly 4 million insured cats and dogs in the U.S., more than double the number in 2017.
The Affordability of Pet Insurance
Contrary to popular belief, pet insurance can be more affordable than you might think. In 2023, the average cost of pet insurance was $44 per month for dogs and $30 per month for cats, as reported by Forbes Advisor. This cost is based on a policy with $5,000 in annual coverage, a $250 deductible, and an 80% reimbursement level.
Is Pet Insurance Worth It?
The worth of pet insurance depends on various factors, such as your pet’s health, potential vet expenses, and your willingness to bear the financial burden. Pet insurance can help offset significant unexpected vet bills, such as cancer treatment or surgery for a broken bone, which can cost thousands of dollars. Without insurance, these expenses would come out of your pocket. Therefore, it’s crucial to weigh the monthly cost of pet insurance against potential vet expenses to determine if it’s worth it for you.
Consider this example: Let’s say you’ve been paying for pet insurance for your dog for three years, totaling $2,052 in premiums. Suddenly, your dog swallows a small toy, resulting in $4,000 in vet bills. With a $500 deductible and a 90% reimbursement level, your out-of-pocket cost for the incident would be $850. In this scenario, you’ve paid a total of $2,902 in premiums and out-of-pocket expenses, saving about $1,100 by having pet insurance.
The main purpose of pet insurance is to provide financial protection against major vet bills. According to Walter Haugland, vice president of marketing for Pets Best, “Four out of five pets will have an unexpected emergency. It’s almost impossible to plan for the unexpected. That’s where pet insurance comes in.”
Should I Get Pet Insurance?
When deciding whether pet insurance is worth it, consider the following:
- What are you willing to pay out-of-pocket for vet bills?
- How would you manage costly vet expenses if they were to arise unexpectedly?
You may have an idea of how much you’re willing to spend on vet bills for emergencies, but in a life or death situation, you might be more willing to stretch your budget than you initially thought. Ultimately, pet insurance can provide peace of mind and options for making the best care decisions for your pet without financial risk.
Average Treatment Costs for Pets
To determine if pet insurance is worthwhile, it’s helpful to be aware of the potential treatment costs. Here are some examples of average treatment costs for pets, courtesy of Pets Best:
- Broken bones
- Toxic ingestion
- Dental illnesses like gingivitis
- Chronic conditions like diabetes
- Breed-specific conditions like hip dysplasia
- Emergency care
- Surgery
- Diagnostic testing
- Hospitalization and surgery
- Prescription medications
It’s important to note that the cost of pet treatments is steadily rising. For example, the cost of treating a broken bone has increased by 16% year-over-year for dogs and 6% year-over-year for cats, according to data from Pets Best.
What Does Pet Insurance Cost?
The average annual cost of pet insurance is approximately $528 for dogs and $360 for cats, based on $5,000 in annual coverage, a $250 deductible, and a 90% reimbursement level. However, the actual cost of pet insurance can vary based on several factors:
- Pet’s breed: Certain breeds are more susceptible to specific conditions, resulting in higher insurance costs. Larger dogs typically have higher premiums.
- Pet’s age: As pets age, they become more prone to accidents and illnesses, leading to increased insurance costs.
- Pet’s gender: Female pets may have lower insurance premiums as they are considered lower risk.
- Location: Vet costs can vary by location, affecting the cost of coverage.
What Does Pet Insurance Cover?
Unlike human health insurance, pet insurance plans are typically reimbursement-based. This means that you pay upfront for your pet’s vet bills and then submit a claim to the insurance company, which reimburses you for eligible expenses. Pet insurance allows you to submit vet bills from any licensed veterinarian, as there are no provider networks like those in human health insurance.
Accident and illness pet insurance plans typically cover a range of treatments, including broken bones, toxic ingestion, dental illnesses, chronic conditions, breed-specific conditions, emergency care, surgery, diagnostic testing, hospitalization, and prescription medications.
Alternatively, there are accident-only pet insurance plans that cover veterinary expenses related only to accidents, such as torn ligaments or ingesting something poisonous. These plans do not cover expenses related to illnesses like ear infections or cancer.
You can also choose to add wellness or routine care coverage to some pet insurance plans. This add-on covers expenses like routine check-ups, microchipping, vaccinations, and flea/tick prevention.
What Does Pet Insurance Not Cover?
While pet insurance can be beneficial, it’s essential to understand its limitations. Here are some common exclusions:
- Experimental treatment: Pet insurance typically does not cover treatments considered experimental or investigational.
- Food, dietary, and nutritional supplements: The cost of your pet’s regular food and supplements is usually not covered, although some plans cover prescription food and supplements.
- Grooming: Services such as baths, nail trims, and shampoos are typically not covered.
- Non-veterinary expenses: Pet insurance does not cover non-veterinary expenses, including licenses, certifications, government compliance fees, record access or copying, and waste disposal services.
- Pre-existing conditions: Pre-existing conditions refer to illnesses or injuries that your pet had before your coverage started. Many insurance plans exclude coverage for pre-existing conditions, although some may cover “curable” pre-existing conditions if your pet hasn’t shown signs or symptoms for a specified period.
Pet Insurance Deductibles, Reimbursement, and Coverage Caps
When selecting a pet insurance policy, you can choose a deductible amount, which is the initial amount you pay before the insurance coverage begins. Deductible amounts typically range from $50 to $1,000.
There are two types of deductibles:
- Annual deductible: You pay the deductible amount for each policy term. Once you meet the deductible during the policy term, you won’t have to pay it again until the next year.
- Per-condition deductible: You pay a deductible for each condition or incident. For example, if your pet has chronic allergies, you would pay a deductible for related medical expenses. Once you meet the deductible for a specific condition, you won’t have to pay it again for treatments related to that condition. However, if your pet develops a new condition, you will have to pay a new deductible.
When selecting a pet insurance policy, you’ll also choose a reimbursement level, which determines the portion of vet expenses that the insurer will cover after you meet the deductible. Common reimbursement levels are 70%, 80%, or 90%. Some insurance companies may offer 100% reimbursement for vet expenses.
Additionally, some pet insurance companies allow you to choose an annual coverage cap, which is the maximum amount they will cover in a policy year. Some companies offer unlimited annual coverage.
Are Pet Owners Buying Pet Insurance?
Pet insurance has been on the rise in popularity, with a 28% increase in total insured pets in the U.S. from 2020 to 2021, according to the North American Pet Health Insurance Association. Among insured pets, dogs make up 82% compared to 18% for cats.
The increase in pet insurance can partly be attributed to the COVID-19 pandemic. A Forbes Advisor survey found that 78% of pet owners acquired a pet during the pandemic, contributing to the surge in pet insurance adoption.
Alternatives to Pet Insurance
If pet insurance isn’t your preferred option, there are alternative ways to pay for your pet’s veterinary care:
- Savings account: Setting aside money in a savings account specifically for your pet’s vet bills can help cover expenses without paying an annual insurance premium. However, this approach may deplete your savings in the event of a major accident or illness.
- Credit card: Paying vet bills with a credit card is an option, although the high interest rates could be a drawback. Consider utilizing a specialized credit line such as Paw Protect, which offers a $5,000 line of credit without a credit check. This allows you to use the credit line while you wait for insurance reimbursement.
- Financing: Taking out a personal loan from a bank or lending institution can provide funds for your pet’s vet bills.
- Payment plan: Many veterinarians offer the option of negotiating a weekly or monthly payment plan.
- Fundraising: Crowdfunding platforms like GoFundMe or Waggle allow pet owners to raise funds specifically for their pet’s vet bills. These platforms ensure that the funds go directly to verified veterinarians.
- Other alternatives: Some vets accept CareCredit, a credit card designed for health care expenses. Additionally, there are other pet financial aid options available, and The Humane Society provides a list of resources.
Here are answers to some frequently asked questions about pet insurance:
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Is pet insurance worth it for every pet owner?
- The worth of pet insurance varies depending on individual circumstances. It’s important to assess your pet’s health, potential vet expenses, and what you’re willing to pay out-of-pocket before determining if pet insurance is worth it for you.
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Can I choose any veterinarian with pet insurance?
- Yes, you can submit vet bills from any licensed veterinarian to your pet insurance company. There are no provider networks like in human health insurance.
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Are pre-existing conditions covered by pet insurance?
- Pre-existing conditions are generally excluded from pet insurance coverage. However, some plans may cover “curable” pre-existing conditions if your pet hasn’t shown signs or symptoms for a specified period.
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Can I add wellness coverage to my pet insurance plan?
- Some pet insurance plans offer the option to add wellness or routine care coverage. This add-on covers expenses like routine check-ups, vaccinations, and preventive care.
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Are there alternatives to buying pet insurance?
- Yes, alternatives to pet insurance include setting up a savings account, using a specialized credit line, taking out a personal loan, negotiating a payment plan with your veterinarian, or utilizing crowdfunding platforms.
Pet insurance can provide financial protection and peace of mind for pet owners. By weighing the monthly cost of insurance against potential vet expenses, you can determine if it’s worth it for you and your furry friend. Remember to consider your pet’s health, your willingness to pay out-of-pocket, and the potential costs of treating various conditions. Whether you choose pet insurance or an alternative payment method, the goal is to ensure your pet receives the care they need without placing undue financial burden on yourself.
