It’s not unusual for people to think of a pet as a member of their family. (There may even be days when a cat, dog, or bird is by far the household favorite.)
So of course those pet owners want to be sure they’re providing the best possible care for their animals without having to worry about what a trip to the veterinarian might cost.
Pet insurance offers a way to help pay for that care—whether it’s a routine checkup or an emergency. However, just like health insurance for the humans in the family, choosing the right pet insurance policy can be complicated.
There’s a wide range of coverage options and policy costs to consider. And pet insurance may not be the right fit for every pet owner.
What Is Pet Insurance?
Though it has a lot in common with human health insurance coverage, a pet policy actually falls under the property and casualty insurance classification.
It has been around for almost 100 years, but has only been available in the United States since 1982, when a subsidiary of Nationwide sold its first policy to cover the dog that played Lassie on TV.
And it’s growing in popularity: The North American Pet Health Insurance Association reports that the industry has seen double-digit increases in the past five years, with an average U.S. annual growth rate of 22.6%.
Most of the 2.5 million pets insured are dogs (83% in 2019) and cats (17%). But some insurers may offer coverage for birds, fish, and other pets.
Pet policies are designed to protect pet owners from the high cost of taking their animal to the vet. (If a pet bites another animal or person, those costs typically are covered by homeowner’s insurance.)
There are a few types of pet insurance. Coverage can be limited to accident-only care for an animal, or it can be more comprehensive and include treatment for injuries and illness.
Some policies also include wellness costs, such as vaccinations, dental care, and medical tests. A few include extra benefits, such as coverage for pet care when an owner has an emergency, or coverage for vet care when the owner travels out of the country with the pet.
But preexisting conditions and cosmetic procedures usually aren’t covered. And policies tend to come with a waiting period of 10 to 30 days, which means if a pet is diagnosed with an illness or is injured before that time is up, treatment for that condition won’t be covered.
How Much Does Pet Insurance Cost?
The average cost of an accident and illness pet policy was $48.78 per month for a dog in 2019, or $585.40 per year, according to the North American Pet Health Insurance Association. For a cat, the average cost was $29.16 per month, or $349.92 per year. Adding wellness care and other benefits can increase the cost of a policy. So can the deductible, co-pay, and maximum coverage amounts the pet owner chooses.
The most common co-pay in the United States is 80%, which means the insured pet owner can be reimbursed for up to 80% of a qualifying claim.
The cost of coverage also may be affected by where the pet owner lives. In cities or regions where veterinary practices generally charge more for office visits or treatments, the cost of pet insurance may be higher.
And coverage may cost more based on a pet’s breed and age as well. Because some purebred cats and dogs may be more susceptible to certain medical conditions, they can be more expensive to insure.
Age is a factor. The older a pet is, the more it may cost to get coverage—both at the time of enrollment and as the pet ages. (It may be difficult to even find a company that will insure a much older pet.)
The good news is, there are no “out-of-network” provider charges to worry about with pet insurance. As long as the pet owner takes Fido or Fluffy to a licensed vet, and the expenses for the visit qualify, it’s just a matter of filing a claim. Some insurance companies may pay the vet directly, but most reimburse the pet owner after the claim is submitted and verified.
How Can Pet Owners Find Prices and Plans?
Because every pet and every plan is a little bit different, it can pay to do some research.
An increasing number of employers now offer pet insurance in their benefits packages, which could mean a lower premium. So pet owners may want to check with their human resources department to see what their company has to offer.
It’s also easy to get an online price quote from many of the companies that offer pet insurance. A quick search will turn up several well-known insurers (Nationwide, Progressive, Geico, Allstate) that offer coverage, along with insurance companies that are strictly for pets. The insurer will ask a few questions (the pet’s name, age, gender, breed, any preexisting conditions), and then provide quotes for three or more plans, along with some details about the benefits those plans include.
It also may help to have an idea of what it costs to treat common (and not-so-common) problems a certain type of pet might encounter.
For example, the analysts at ValuePenguin found that the average cost of a vet visit for a dog with a common condition like a skin infection is $176, and for an ear infection, $149. Those bills might be daunting but not necessarily devastating for a family’s monthly budget. But canine chemotherapy could cost more than $1,000 a month, according to PetCareRX.com . And the bill for an entire course of treatment could be as much as $10,000.
The same thing goes for cats. An occasional visit to the vet for a urinary tract condition ($295) or an upper respiratory infection ($219) might be manageable. But the cost for a course of cat chemotherapy could be a budget-busting $10,000.
Planning for those costs could help pet owners decide if insurance is something they should consider. (Your vet also may be able to provide some helpful information that pertains to your specific pet.)
Too busy to do a deep dive into pet care costs and insurance options? There are plenty of online reviews and “best of” lists from folks who already have done the work. (As with any review or list, pet owners may find up-to-date information from an unbiased source to be the most useful.)
So, Is It Worth It?
As with so many financial decisions, there are pros and cons to purchasing a pet health policy.
Insurance may take some of the stress out of making treatment decisions for a beloved pet based on the ability to pay. Although there still could be out-of-pocket expenses to consider, it might help avoid what the pet insurance association calls “economic euthanasia,” when a pet owner makes the heartbreaking choice to put down a sick or injured animal because the required care is just too expensive.
Insurance also might help a pet owner sidestep the temptation to use a high-interest credit card to pay for care.
Another plus: Because policies can be customized, it may be possible to find one that provides basic coverage and still works within the family budget. And pet owners who love their vet won’t have to switch to a new provider.
But pet insurance doesn’t cover pre-existing conditions, and premiums also may be higher for breeds that are vulnerable to costly health conditions. The cost also goes up as an animal gets older, which is when many pets start having problems that require expensive treatments.
And, as is the case for most types of insurance, if policyholders don’t use their benefits, they don’t get their money back. So, for example, if the pet owner opts for an accident and illness policy and the pet stays healthy for several years, the insurance bills could end up costing more than the vet bills.
If you aren’t sure if pet insurance is right for you, it might help to look at how the cost would fit with your current finances.
If money is tight, is there something you could or would give up in order to pay for a pet policy? A cash management account can help you manage your overall budget and determine if you can afford pet health insurance, or if you’d have to make some adjustments to make it work.
It’s also important to make sure that other aspects of your life are insured. SoFi Protect offers insurance plans for your home and car, plus life insurance plans to help you protect your loved ones in the future.
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