Is Pet Insurance Worth It?

You'd do anything for your pet, right? Unfortunately, that unconditional love could cost you, especially when it comes to keeping your pet healthy. In addition to everyday costs (food, toys, grooming, cleaning expenses), have you been to the vet's office lately? According to the American Veterinary Medical Association, pet owners can spend more than $27.8 billion on veterinary bills every year.

One way to help curb the cost of vet bills is pet insurance, which is similar to health insurance you'd purchase for yourself or your family. Pet insurance has grown in popularity in recent years. In fact, from 2020 to 2021, the number of insured pets grew by 28 percent—a total of 3.9 million by the close of 2021. Still, you might be wondering whether or not it's really worth it to get a plan to help cover the cost of such things as routine checkups and unexpected emergencies. Here are a few pros and cons to help you decide.

The Pros

You Have Lots of Options

All vets accept pet insurance for animals older than eight weeks, so you can choose any licensed veterinarian you wish. Several insurance companies offer pet health care coverage, and there's a wide range of coverage options to choose from. Basic plans that cover accidents and illnesses have an average monthly cost of about $49 for dogs and $29 for cats.

An analysis comparing pet insurance companies' rates and overall value conducted by Consumers' Checkbook concluded that while many veterinarians continue not to see any value in pet insurance, there has been some improvement in the offerings. Consumers' Checkbook says pet insurance has definitely improved, in large part thanks to growing competition.

What's more, the publication notes that with so many companies entering the market, payments and benefits provided by policies are now closer to 70 to 90 percent of a vet bill. That means that coverage can significantly reduce the price of many treatments and surgeries.

Pet Insurers Are Now Covering Routine Checkups

With most insurers, you can also pay a higher premium for a lower deductible or to add preventative care (vaccines and routine visits) to your coverage. Here are some insurers that offer routine wellness care (aka "nose to tail" care):

• Lemonade
• Spot
• Embrace
• ASPCA Pet Health Insurance

Some Insurers Pay Vet Directly

A number of companies will pay the vet directly (rather than putting you through a long claim reimbursement process). Of course, check with your vet to ensure they will accept direct payment from insurance. Ask your potential pet insurer if they have the option to do this. Here are three insurers who do:

• Trupanion
• Paw Protect
• Pets Best
  

Pet Emergencies Are Less Stressful

Pet insurance, like any type of insurance, also offers peace of mind. "It's heartbreaking to watch families have to decide whether or not they can save their pet's life because of finances," says Donnell Hansen, DVM, an oral surgeon at BluePearl Veterinary Partners in Blaine, Minnesota. "Insurance gives you extra resources and helps get rid of the guilt."

The Cons

Claims Can Be Slow and Tedious

Not all of these companies pay the vet directly. That means you may find yourself in a situation where you have to cough up $5,000 for your pet's surgery and then go through the paperwork (and potentially lots of waiting) before you get reimbursed.

Rates Go Up With Pet's Age and Health

Many pet insurance companies will offer low premiums when your pet is young, but as they age, pet insurance rates may climb too. And not unlike health insurance for humans, a large number of plans won't cover charges related to a preexisting condition, such as diabetes or hip dysplasia (that's why, ideally, you'll want to sign up when they're young for lower rates).

If your pet is older and has had multiple surgeries or a chronic issue, pet insurance won't actually do much. And if your pet develops a chronic condition while covered, the company could drop your coverage or raise your premium unless you have a plan that offers "continuing coverage."

High Premiums Can Keep Insurance out of Reach

The cost of pet insurance premiums significantly increases when you add on preventative care. If your budget is tight, you might be better off seeking out a low-cost vet clinic through the Humane Society or the ASPCA. Visit pethelpfinder.org for more affordable solutions.

So, it really comes down to what's right for you. There are those who argue that as long as you account for routine vet bills when figuring out your household budget, you can probably skip pet insurance. However, if you're worried about how you'll pay the bill if your cat or dog has an accident, "opt for a plan with a high deductible and a low monthly premium that will cover catastrophic events," says Kate Spencer, a spokesperson for the American Animal Hospital Association.