Is Pet Insurance Worth It? 2024 Guide

You come home to find your dog vomiting and lethargic. After rushing them to the vet, you find out they swallowed one of your socks and need emergency surgery — at a cost of several thousand dollars. Can you pay that bill? If not, it may be worth considering pet insurance.

Pet insurance helps cover the cost of medical care for your furry friend. It can reimburse you for expenses such as cancer treatment, emergency care, prescription drugs and surgery.

In some dire situations, pet insurance can save the life of an animal that would otherwise be euthanized if its owner cannot afford treatment. But if your pet rarely gets sick, you could be paying thousands of dollars in premiums without getting much in return.

So is pet insurance worth it? Here is some information to help you make a decision.

An increasing number of owners are choosing to insure their pets. More than 4.8 million US dogs and cats will be covered by pet insurance in 2022 — an increase of 22% from last year, according to the North American Pet Health Insurance Association, or NAPHIA^[0]

That’s significant growth, but the industry covers only a small portion of America’s pets. In the US, there are an estimated 65 million households with dogs and nearly 47 million households with cats, according to the 2023-2024 American Pet Products Association National Pet Owners Survey^[0]

The average annual cost for an accident and illness policy is about $640 for dogs and $387 for cats, according to NAPHIA data from 2022^[0]

If you choose an accident-only policy, the annual cost drops to $201 for dogs and $122 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 if they get sick.

Premiums can vary greatly based on the age and breed of your pet, the cost of veterinary care where you live and the insurance policy you choose.

Be aware that rates tend to increase as your pet ages and is more prone to health issues. If the plan becomes too expensive for your budget, you can cancel the coverage when your pet starts to need it more.

To see how much rates can increase over time, we looked at sample quotes from Best Pets, a popular pet insurer, for a medium-sized, mixed-breed dog in Katy, Texas. Here are the monthly prices we found for a policy with a $5,000 annual limit, a $500 deductible and an 80% reimbursement rate:

That may not sound too dramatic when you see the increases month-to-month, but here’s how your average annual cost will change over the 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 up to age 14 to reflect longer cat life expectancy.)

Although overall premiums are lower for cats, there is a similarly sharp price increase as they age.

In the end, you will likely pay thousands of dollars for insurance if you keep your pet’s life policy.

Note that these are sample numbers for a pet insurance company in a ZIP code. Your price will vary, so it’s worth shopping around.

So what do all those premiums get you? Although insurance can be a godsend if your pet faces an expensive diagnosis, your plan likely won’t reimburse every dollar you spend at the vet.

Most policies include an annuity deductible, the amount you are liable for before the insurer starts paying. Once you meet your deductible, most plans pay a certain percentage of your vet bill — usually 70%, 80% or 90%. And you may be subject to an annual maximum payout.

Insurers do not all handle deductibles and reimbursement rates the same way. Some apply your deductible first, then pay a percentage of the remaining bill. Others apply your reimbursement rate before you meet your deductible, which means you’ll have to spend more out of pocket before you’re eligible for reimbursement.

Say you have a $500 deductible in a plan that pays up to $10,000 per year and reimburses 80% of your expenses. If your dog needs a $2,000 operation and you haven’t put anything toward the deductible, your plan will pay either $1,100 or $1,200, depending on when your reimbursement rate is applied. Here’s the math.

• When the deductible first applies: $2,000 – $500 deductible = $1,500. 80% of $1,500 = $1,200.

• When the reimbursement rate is first applied: $2,000 x 0.8 = $1,600. $1,600 – $500 = $1,100.

You can often customize your plan with a lower deductible or higher reimbursement rate, but your premium will increase accordingly.

Even if you find a plan with no annual limit and 100% reimbursement, it still may not cover you for every veterinary expense.

For example, most plans don’t cover it spay or neuter surgery unless you purchase an add-on for wellness and preventive care. The same goes for vaccinations, annual checkups and dental cleanings. Insurance is designed to cover unexpected expenses, not the usual expenses associated with pet ownership.

But pre-existing conditions is probably the most important exclusion in almost every pet insurance plan. Pet insurance generally only covers new injuries or illnesses, not conditions the animal had before the policy took effect. So don’t try to buy pet insurance to pay for your cat’s chemotherapy after they’ve been diagnosed with cancer – it probably won’t be covered.

That’s why pet insurance may be more important for pets that are young and healthy than those that 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 their coverage later, all of their pre-existing conditions will count as pre-existing conditions, even those covered by the previous plan.

Dog owners spend an average of $472 per year on surgical vet visits and $250 per year on routine veterinary visits, according to 2022 survey statistics from APPA. Cat owners have lower annual costs on average, spending $232 on surgical vet visits and $198 on regular vet visits. (Note: 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 2021 data from NAPHIA, the most recent available.

Some conditions on this list are relatively minor and inexpensive to treat, such as a urinary tract infection that resolves with a course of antibiotics. But others may incur greater costs.

For example, a common skin mass in dogs is a mast cell tumor, a type of cancer. Surgery to remove one of these tumors can cost $500 to over $1,000. For tumors that are aggressive or difficult to remove surgically, your veterinarian may also recommend radiation or chemotherapy, which can cost thousands of dollars.

If your pet only faces minor health conditions throughout its life, you may end up paying more for pet insurance than you get back. But if there is a serious problem, insurance may be worth it.

If you’d rather not buy pet insurance, you can try one of the following ways to pay for your furry friend’s care.

Instead of paying a monthly premium to a pet insurance company, you can contribute to a high yield savings account for veterinary expenses.

The advantage of this strategy is that if your pet stays healthy, you will still have money to use for other things. The downside is that you may not have enough saved up if your puppy has an expensive accident three months after you bring him home.

If you find yourself unable to afford care for your pet, you still have options. Your veterinarian may be willing to work with you on a payment plan, or you may be able to find 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 provide grants or other assistance. The Humane Society of the United States has a useful list of resources.

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 has health problems.

• A large veterinary bill will not be a financial hardship for you.

• You’d rather risk an expensive diagnosis than pay for insurance you can’t use.