Is pet insurance worth it? An investigation

A woman sitting on a couch holding her two pet dogs on her lap
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Those with pets know that they're just like any member of the family. You want to protect them and keep them safe, no matter the cost. As such, buying a policy to cover any diseases or accidents that might potentially befall your animal might feel like a no-brainer. But is pet insurance actually worth it?

According to the families of the 2.1 million insured pets in North America (1.83 million in the U.S. alone) per the North American Pet Health Association (NAPHIA) 2018 State of the Industry Report, the answer is a clear yes. The number of insured pets rose 17 percent from the year before, and over 50 percent since 1982, when Lassie of TV fame became the first American dog to receive pet insurance.

Of course, just because so many people have chosen to insure their pets doesn't mean it's a necessity. Yet Jason Hargraves, insuranceQuotes managing editor, tells Mic that buying a policy — which, like all forms of insurance, requires paying an upfront cost in order to ensure that the company covers any future accidents or illnesses — can actually be a very smart idea.

"It’s the best way to protect yourself financially from having to absorb the cost of an emergency vet bill or extended treatment costs due to your pet’s illness,” explains Hargraves. “Vet bills can run well into the thousands of dollars, so if you can’t afford to be out that much money in case of an emergency, then pet insurance is probably your best option.”

That may be so, but there are several factors to consider before adding pet insurance to your existing list of bills.

What it covers

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Each company's plan differs, so "be sure to read the fine print because some pet policies only cover accidents, and not some diseases, such as cancer," advises Hargraves. There are two main types of plans to choose from: accident and illness, or accident-only coverage. The NAPHIA report found that 98 percent of pet owners opted for the former, but don't be pressured into following the pack. Do what feels right for your pet's health, breed, age, and typical level of activity.

If your dog is young and healthy, accident-only plans might make the most sense as they're meant to cover events like poisoning or injury due to human carelessness, according to Hargraves. (Keep in mind, though, that a young and healthy outdoor cat might be at a greater risk of getting hit by a car or getting injured by a fellow animal than its older, indoor counterpart.)

As your pet grows and your needs change, you can always switch to a plan that covers illness, too. That coverage can be helpful if your pet suffers from a chronic condition that you’ll need to cover for the foreseeable future, as opposed to an isolated incident like a broken bone. It’s also a wise option for older pets that are more at risk of contracting degenerative diseases.

What it costs

According to NAPHIA, yearly accident and illness plans cost on average $535.95 and $335.19 for dogs and cats, respectively, while accident-only plans cost $190.08 and $152.66, respectively. Depending on the plan, you can expect to get a reimbursement of around 70 to 90 percent of your claim once you’ve met your deductible, according to the ASPCA. Factors like breed, location, size and age, can all affect the cost of your policy, too.

In some cases, it’s actually more expensive to buy pet insurance than to pay out of pocket for one or two routine check-ups or procedures a year. While taking your pet to the vet for a routine check-up can cost around $50 or more, according to PetCareRx, you’ll be playing a role in illness prevention and early detection, which can mitigate the high costs associated with battling an advanced disease down the line. According to ValuePenguin, the average cost of the 10 most common conditions like bladder issues and ear infections is $252.75 for dogs, and $266.79 for cats.

If you choose to get insurance, “you’d need to have a wellness plan that covers routine vet visits as part of your pet health insurance policy. Some policies won’t cover routine visits, just like some policies only cover emergencies,” advises Hargraves. (Wellness plans are unlike insurance in that you pay a fixed amount for a range of services for a fixed time period, according to the American Animal Hospital Association).

Hargraves adds that premiums rise as you extend coverage, so if your pet is particularly healthy in the earlier years, “you may not come out ahead. Look at the costs that could occur over your pet’s lifetime and not at the costs for just one or two years,” he says. “Make a point to re-evaluate your pet’s overall health each year to see if you are still making the most financially sound decision.”

What to look for

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Shop around for pet insurance plans like you would any form of insurance, be it health, auto, or home. “Picking the best insurer for your pet is going to depend a lot on your pet’s current health and what you can afford to pay for a premium and out-of-pocket expense,” says Hargraves. If you need help choosing a plan, your veterinarian can be a great resource and wealth of knowledge, since they’ve likely heard feedback from other pet owners and clients, or have personal experiences to share.

Top rated pet insurance companies include 24PetWatch,Trupanion, PetsBest and Healthy Paws. When doing your research, make sure accredited veterinarians work on staff to process your claims and issue reimbursements. According to the American Veterinary Medical Association, policy terms should explicitly spell out copays, exclusions, how much your deductible will increase over time, the percentage of coverage for each type of treatment and procedure, and how they define a pre-existing condition. Also, if you have a particular allegiance to a certain vet, find out which insurance providers they accept. The policy should ideally let you choose your own vet, especially if you and your pet have an existing trusting relationship with them.

Once you find a company and policy that seems like a good fit, make sure you get all the information upfront, especially for payment. Like with all insurance policies, you might have to pay the vet out of pocket for appointments, then file a claim and wait to get reimbursed — and there’s always a risk that your claim will be denied. To avoid any surprises, “You should have a good understanding when you take out a policy as to what is and is not covered, as well as what percentage of the cost for any given procedure will be paid,” says Hargraves.

He adds that in non-emergency situations, you can contact your insurance provider to clear up any confusion after you've received your reimbursement. Unfortunately, delays in payments and incorrect reimbursements from the company might be out of your hands, but doing your research ahead of time on what to expect will likely make things at least a bit less of a hassle.

Why your pet might not qualify

Like humans, underlying and pre-existing conditions can prevent your pet from qualifying for insurance altogether. And even if they do qualify, their illness might be listed as an exclusion, so ensure their plan covers whatever conditions they have. That especially goes fo senior animals, as while rescuing an older dog might be a noble way to enter into pet ownership, some companies won’t insure these pets as they are considered too high of a liability, says Hargraves.

While purchasing pet insurance can offset most of the costs associated with serious illness and complicated procedures, don't buy a policy blindly; take plenty of time to research all the different options and your animal's specific needs before purchasing a plan — if you choose to do so at all.