Owning a pet comes with an array of costs, and medical care can be one of the big ones. Does that mean you should get health insurance for your pet? Is buying pet insurance worth it?
Insurance policies for pets are more worthwhile for some pet parents than others. While a policy that covers general pet wellness and preventive care may not make economic sense (since the cost of the premiums can be similar to cost of care), a policy that covers accidents and illness can be a smart money move, particularly for pet parents who would have trouble covering a hefty vet bill should Fluffy or Fido suddenly get sick or injured.
But plans vary significantly on what they cover—and what they cost. Here are some key facts to consider when shopping for a pet insurance plan.
Average Cost of Pet Healthcare and Emergencies
Between food, daily care, equipment and toys, the cost of owning a pet can be high. The cost of veterinary care can also stack up pretty fast.
Pet healthcare costs vary widely, depending on region and what kind of care your pet may need. But, according to the American Pet Products Association , dog owners spend an average of $212 per year on routine vet visits, while cat owners shell out an annual average of $160 on routine care.
Heartworm tests and prevention can tack another $35 to $132 to the annual healthcare bill, while flea and tick prevention can cost $40–200 per year.
Even a healthy pet may need emergency care, ranging from a few hundred dollars to well over $1,000 Wound treatment and repair, for example, can run as high as $2,000 for a dog. Emergency surgery for a large dog can cost between $2000 and $5000.
What is Pet Insurance?
Once a niche product, pet insurance policies have been steadily gaining in popularity. Indeed, many employers now offer pet plans as part of their benefit packages. But what exactly is pet insurance—and how does it work?
Like health insurance for people, pet insurance companies help ease some of the costs of keeping your pet healthy. You can choose from different levels of coverage, with each plan costing a monthly or annual premium based on how much coverage you choose.
Some plans cover basic scenarios like accidents and injuries, some only cover accidents, and others include wellness/preventative care. The more comprehensive the coverage, the higher you can expect the cost to be.
As with health insurance for people, pet policies include exclusions, various levels of coverage, co-pays, deductibles (a certain amount you must pay out of pocket before coverage kicks in), and payment limits.
Most pet insurance policies exclude pre-existing conditions and hereditary or congenital conditions. Some carriers will not accept pets younger than eight weeks or older than 12 years, and many policies have waiting periods before benefits for injury, illness and orthopedic care begin.
Pet insurance typically uses a reimbursement model: You pay the full amount due when you take your pet in for care, then submit a claim to the insurance company afterwards.
What Pet Insurance Covers
As with human health insurance, pet health insurance offers several different types of coverage, each with its own list of coverage options and costs. Although the names used vary by insurer, the three most common types of coverage are:
• Accident and illness This typically covers treatments and tests for accidents and illnesses.
• Accident-only This coverage generally takes care of accidental injuries, such as poisoning or ingestion of a foreign object, being hit by a car, cuts, and other physical injuries. Accident-only coverage is often preferred by owners of older pets that have aged out of comprehensive coverage.
• Wellness plans Wellness plans tend to cover preventive-care visits, such as check-ups and routine vaccinations, and you can buy one as a stand-alone policy or as an add-on to an accident and illness policy.
Before deciding whether you want to buy a pet insurance policy, it’s a good idea to download sample policies from insurers. You can then carefully review each policy for limitations, exceptions, and co-payments. You can also reach out to a rep with questions.
What Pet Insurance Doesn’t Cover
It’s just as important to know what a pet insurance option doesn’t cover as it is to know what it does.
As mentioned above, Just about every pet insurance policy excludes coverage of pre-existing conditions. Some pet insurance options also may have breed-specific exclusions, or it could cost extra to cover specific breeds. Many plans also limit the amount you can claim, either annually or over your pet’s lifetime.
As for each individual option, wellness plans likely will not cover any treatments having to do with accidents, common injuries, or any other emergency treatments.
Accident-only plans will likely not cover any cost associated with illness, while accident-illness plans will likely not cover any preventive care or any care related to pre-existing conditions.
An accident-illness plan with a wellness add-on provides the most comprehensive coverage. But again, it will likely not cover any care for a pre-existing condition, and the coverage could come with some breed-specific restrictions. That’s why it’s essential to read through the fine print of every policy option before making the decision on which one is right for each pet.
How Much Pet Insurance Costs
The cost of pet coverage varies widely, but the average accident and illness premiums cost $585 a year for a dog and $350 for a cat, according to the North American Pet Health Insurance Association.
Costs, however, can rise depending on your pet’s breed (purebreds may cost more to insure because they are more susceptible to some hereditary conditions), age (plans tend to cost more as your pet ages), region (the higher cost of vet care in some areas is factored into your premium), and the coverage you choose.
Pros and Cons of Pet Insurance
Pet insurance can make pet treatments and services more affordable—by paying annual or monthly premiums, the insurance company bears the brunt of covered expenses.
Pet insurance also protects the emergency funds in your cash management account. If your pet is young or healthy, or you choose a lower tier, you can get accident and illness coverage for a fairly low cost, which pet owners may find well worth the security of knowing your pet can get the help it needs.
But it’s key to read the fine print. Many plans limit the amount you can claim, either annually or over your pet’s lifetime. If your pet is unfortunate enough to suffer a major medical problem, you could quickly max out your plan’s limit and find yourself paying the difference.
Depending on the cost of the premium, wellness-only and wellness add-ons may not be worth the price, since they can end up costing about the same, or potentially more, as paying out of pocket for routine care.
Alternatives to Pet Insurance
Again, like humans, unexpected expenses can come up from time to time, but that doesn’t mean they need to hurt your pocket.
Another way a pet-owner can pay for both expected and unexpected medical bills that come with pet ownership is to have an emergency fund specifically earmarked for your pet. Stashing just a little bit of cash each month into your pet care fund can slowly add up to a significant financial cushion.
Whether you do or don’t spring for pet insurance, you can lower the cost of pet care by monitoring your pet’s diet and exercise and staying up to date on needed vaccines. This can help keep your pet from needing emergency care—and prevent getting hit with an outsize medical bill. Even knowing the most common ailment associated with your pet can prevent a minor problem from turning into something major.
Buying pet insurance that covers accidents and illness can be a reasonable hedge against a multi-thousand dollar vet bill. The payoff for wellness coverage, however, is less clear, as the amount you pay may be close to the amount you would have paid anyway.
If you decide to take out pet insurance, do your homework and make sure you’re aware of all the policy’s limits and exclusion.
Ready to adopt a new fur baby? Setting up an emergency fund for Mittens or Rex can be a smart money move. SoFi Money® makes it easy to set aside just a little money each month to cover unexpected pet care expenses.
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