Pet Insurance: Pros and Cons

It hurts us to spend even a moment thinking about our pets being sick or injured, but a little planning ahead can reduce the financial stress involved with seeking medical treatment critical to saving their health or their life.

In many emergency situations a pet insurance plan can lift a huge monetary burden, possibly making the difference for owners to be able to afford life-saving care. But it differs from how most human medical insurance plans work, so it’s important to understand when it will, and won’t, help you and your dog or cat.

First, there are three basic types of pet insurance available on the market, with many providers offering them as “tiers.”

  • Accident insurance – Covers a percentage of medical costs (anywhere from 20% to 80%) for an accidental injury such as a bite, ingesting poison

The pros:

  • Financial relief from emergency vet care bills — The percentage can vary hugely but insurance policies for pets can cover 70% or more of your claim. A few will even cover 100%, but these are more expensive and difficult to find.

  • Customizable to your needs — Most companies offer two or three tiers of coverage which can be purchased separately or bundled, and you can choose low or higher deductibles. From most to least expensive the tiers are:

    • Accident — Injuries from incidents including insect or snake bites, ingesting harmful substances, cuts, broken bones, eye injuries, etc.

    • Illness — Costs from major and minor illnesses including cancer, diabetes, allergies, arthritis, digestive issues, urinary tract infections, etc.

    • Wellness — Preventive and routine care including vet visits, vaccinations, lab work, spay/neuter, deworming, microchipping, etc.

    • No preferred providers — Most plans will cover services provided by any licensed veterinarian, except for wellness plans offered by a particular veterinary office.

  • May be available through your job — More employers are offering pet insurance benefits with competitive rates and discounts.

  • Peace of mind — Reduces your level of anxiety about your pets’ health by taking the potential budgetary strain out of the equation.

The Cons

  • You pay the bills up-front — Almost all pet insurance is handled on a reimbursable basis, so you foot the entire cost at the time of service and then seek reimbursement by submitting a claim, since most vet’s offices won’t do it for you. Many are processed quickly, but you may not have enough funding available to cover the initial cost or be stressed about whether and when you’ll get your money back.

  • Pre-existing conditions not included — If your pet has already been diagnosed with a health condition medical care related to that condition will not be covered, although some do make exceptions for certain curable pre-existing conditions, including respiratory infections and UTIs, that haven’t recurred for at least six months.

  • You will have some out-of-pocket costs — Unless you pay for wellness coverage you’ll be paying for routine exams and tests. Most accident and illness plans include a deductible that must be paid before coverage starts, and cover a percentage of bills after it’s met. Most also have maximum coverage limits.

  • You may pay for benefits you’ll never use — With wellness plans you may end up paying more for preventive care over the course of a year than you would if you paid for each visit separately, because it covers one-time costs such as spaying or neutering. Illness plans can offer coverage for treatments you’ll never need such as chemo or acupuncture.

The Cost

Annual and monthly premiums vary widely depending on whether you’re insuring a dog or cat, level of coverage, the pet’s age and breed, where you’re located and other variables. Dogs are generally more expensive to insure because they’re considered more accident-prone, and have wider cost variations between breeds.

A 2020 survey by the North American Pet Insurance Association found the average dog owner paid $49.51 per month in insurance premiums, versus $28.48 for cats. All other species are considered “exotic” for pet insurance purposes and coverage may be available under more specialized plans.