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Hashing out healthcare: Is pet insurance worth the money?

September 23, 2020

If you’re among the many dedicated pet owners who end up shelling out hundreds of dollars in veterinary care every year, you may be wondering whether pet insurance would be a good future investment.

The answer to that involves a lot of different factors, including your location, the age, size and breed of your pet and his preexisting conditions. Another consideration could be his projected lifespan; after all, with better pet foods and pet care, our furry friends are living longer and they’re more likely to face an age-related illness.

Of course, you also need to think about what will realistically happen if your pet is faced with several thousand dollars’ worth of medical procedures, and you simply don’t have the money to pay for them. All too often, pet owners are faced with the heartbreaking choice of going into debt to have their pet’s health restored, or being forced to have them euthanized due to lack of funds. If you can envision yourself in that position, you’re far from alone; statistics show only 41% of Americans are in a position to cover an unexpected $1,000 expense.

“Buying pet insurance is both an economic and an emotional decision that needs to be based on your personal financial situation — and what you’re willing to pay for peace of mind,” suggests consumer expert and columnist Herb Weisbaum on

[Listen to this episode of the Raising Your Paws podcast, How to Decide to Get Pet Health Insurance or Not]

Pet insurance is a growing industry

Many people buy and actively use such policies. In fact, when last compiled by the North American Pet Health Insurance Association in 2018, 2.43 million pets were insured throughout the U.S. and Canada, marking a 17% jump from 2017. And those pet owners collectively spent a bundle; premiums in those countries amounted to $1.42 billion, a 27% boost over 2017. The vast majority of those policies, some 88.9%, were for dogs.

The average age of insured pets in North America? About 4.6 years for dogs and 5.5 years for cats.

Interestingly, the U.S. adopted the idea of pet insurance from the Swedes, who consistently insure about half their pets. Before the 1980s, pet insurance wasn’t even available in the U.S.

How does pet insurance work?

The first step in determining whether pet insurance is right for you is to take a hard look at what you get for your money.

According to Yowana Wamala on, a monthly premium for pet insurance usually ranges between $10 and $100 per month, though most pet owners can expect to pay $30 to $50 for a plan with “decent coverage.” For that price range, the site reports, you can expect a policy with a $500 deductible, a $5,000 annual max and an 80% level of reimbursement.

As with human health insurance, once you pay vet fees equal to your yearly deductible you can expect to pay a small portion of each bill for the remainder of the year, with the insurer paying the larger portion. The reimbursement level stipulated with your policy represents the portion the insurer agrees to pay, while the annual max is the most the insurer will pay in a given year before you must pay the remainder out of pocket.

Unlike with human health insurance, pet healthcare fees must initially be paid out of pocket by the policyholder, then the insurance company provides reimbursement.

In general, Yowana says, dog insurance is 60% more expensive than cat insurance, and older and larger animals tend to be pricier to insure.

It’s important to note that most policies won’t cover congenital or hereditary conditions such as hip dysplasia, which is very common. Neither will they typically cover routine office visits, preventative care, dental disease, therapies, treatments or training related to behavioral issues, grooming expenses or issues related to preexisting conditions. The term “preexisting” means your pet had the condition before you established coverage, so a new policy may be largely ineffective if most of its current medical issues can be traced back to that condition.

All that said, most insurers offer the option of several different kinds of policies with different price tags, and you may be able to customize yours to include “add-ons” for goods and services that may not normally be covered.

“It’s important to note that purchasing pet insurance isn’t necessarily more affordable than going without it,” advises Yowana. “A reasonable strategy is to choose a policy that is affordable for your monthly budget, but also keeps your out-of-pocket costs per incident low.”

How do vet costs compare?

When determining the value of an insurance expenditure, of course, you must weigh the cost of premiums against your projected veterinary bills over the next year, minus routine office visits.

So what are some of the prevailing costs? They’re likely to be more expensive in densely populated areas, but Andy Bowen provides these ballpark figures on

  • An E.R. visits costs $100 to $200 for either dogs or cats
  • A specialist exam and consultation runs $100 to $150 for either dogs or cats
  • A hospitalization of one to five days for a dog or cat can cost between $400 and $5,000

Pet insurer Petplan offers a different perspective, placing the average cost of “unexpected veterinary care” for dogs or cats at $800 to $1,500.

This may raise a question in your mind, how likely is it your dog or cat would need extra vet care? Think about things, large and small, that come up in pets. For dogs, it’s skin allergies, ear infections, benign tumors, skin infections and arthritis. Cats most often suffer from bladder or urinary tract disease, dental disease, chronic kidney disease, vomiting issues and excessive thyroid hormone. Consider the out-of-pocket costs to help you decide if vet care is worthwhile.

Be a smart shopper

If you decide pet insurance would be a good idea for you and your pet, you’ll want to start by doing your homework and comparing prices and benefits among the dozen or so companies that offer such policies.

“Look very carefully at the fine print so that you’re not surprised when you file a claim and find that it’s denied,” advises Consumer Reports editor Tobie Stanger in the NBC article.

Weisbaum recommends finding answers to the following questions before signing on the dotted line.

  • Is a physical exam required to get coverage?
  • Is there a waiting period?
  • What percentage of the bill do they pay after the deductible?
  • Are payments capped in any way?
  • Are there co-pays?
  • Does the plan cover pre-existing conditions?
  • What about chronic or recurring medical problems?
  • Can you choose any vet or animal hospital?
  • Are prescription drugs covered?
  • Are you covered if you travel with your pet?
  • Does the policy pay if your pet is being treated and dies?

“If you love your pet and you don’t have the money to cover an emergency medical situation that could cost thousands of dollars, I think you should consider pet insurance,” he writes.

“Remember, insurance is designed to cover you from a catastrophic financial loss, so choose the highest deductible you can reasonably afford (to) help lower the monthly premium.”

Grant Biniasz, marketing director of pet insurer VPI, put it this way to NBC:

“It’s a way to manage risk. If you look at any form of insurance and try to run the numbers, you’re going to find that most people are not going to get back what they pay in premiums. But the people who do are happy they made the investment.”

Choose the right diet for a healthy pet

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