Is Pet Insurance Worth It? Vets Explain How to Choose the Best Plan

Most pet owners love their four-legged friends unconditionally and would do anything in their power to ensure their happiness and wellbeing, but taking care of an animal can become particularly expensive when it comes to their health.

According to the 2021-2022 American Pet Product Association (APPA) National Pet Owner Survey, 70% of U.S. households, or 90.5 million homes own a pet, with Americans spending a total of $32.2 billion per year on veterinary care and products.

Veterinary expenses vary but on average dog owners spend about $242 on routine visits and $458 on surgical visits per year, while cat owners spend about $178 on routine visits and $201 on surgical ones.

It's clear there is a financial commitment involved in owning a furry companion, but is pet insurance worth it? And what does it cover? Newsweek asked the experts.

How Much Is Pet Insurance?

Most pet owners pay on average between $133 and $594 per year on insurance, but the price differs depending on a range of factors such as species of the animal, breed, age, any pre-existing conditions and geographical location.

According to the North American Pet Health Insurance Association (NAPHIA) the price for pet insurance can range from as little as $11 per month for an accident-only coverage to $29 per month for an accident & illness coverage for a cat, while for dogs prices range from $18 to $49 per month also depending on the level of coverage.

Dogs playing with cats
Some pet insurance plans practice disease exclusion. Before choose your plan, check what disease your pet's breed is prone to and make sure it's covered. Getty Images

What Does Pet Insurance Cover?

There are different levels of coverage for pet insurance, and usually the two main categories are accident-only coverage and accident and illness coverage. The first category only covers unexpected accidents, while the second one usually covers accidents as well as common illnesses such as infections or emergency care.

According to Dr. Ann Hohenhaus, Senior Veterinarian at Schwarzman Animal Medical Center in New York City, the first step is to assess what kind of coverage you want for your pet.

She told Newsweek: "Do you want coverage for annual wellness care, preventive healthcare like vaccinations, blood tests and preventive medications like heartworm, flea and tick products? And if a big emergency occurs, you will pay for that out of your rainy-day fund. Or do you want coverage for a catastrophic illness, and you plan to pay out of pocket for routine care? Once you have answered these questions, you can begin to review policies that might meet your pet's needs."

Insurance policy coverage usually has a deductible, which is the portion of the veterinary bill you're responsible for before the coverage starts. Plans with high deductibles are less expensive, while lower deductibles cost more. You can also choose the level of coverage which can vary from 50-90% of the total cost.

How Does Pet Insurance Work?

Pet insurance works similarly to human health insurance and according to Dr Hohenhaus, in some cases, it is even offered as a benefit from your employer.

Pet insurance usually reimburses your medical expenses rather than paying the veterinary clinic directly. You purchase a policy that meets your needs, submit the required documentation and will then be paid money to defray the cost of pet healthcare.

Hohenhaus said: "In human medicine, bills are sent first to the insurance company and then a bill is sent to the patient. Most of the time in veterinary medicine, the client pays the veterinarian and is then reimbursed by their insurance provider."

Beagle dog and brown cat lying together
About 70% of American households own a pet. And most pet owners spend between $133 and $594 per year on insurance. Getty Images

What Pre-existing Conditions Does Pet Insurance Cover?

Some insurance companies have considerable exclusions in their coverage plans, that's why it's always best to review the policy fine print.

In general insurance does not cover pre-existing conditions.

"Get insurance early since a puppy/kitten is less likely to have a preexisting condition. If you are insuring an 8-year-old dog, the insurance company will ask for medical records from your dog to determine if there was a preexisting condition or clinical signs of a preexisting condition. It is always best to get insurance right after or close to the date your pet was adopted," says Hohenhaus.

Some insurance plans also practice age exclusion, meaning they won't enroll an old pet. So before signing up for a plan it's important to check if the policy covers pets at any age and if it runs out when your pet hits a certain age.

Some policies also deny coverage for repeat offenders. For example, if your dog eats something that needs to be removed with endoscopy or surgery and he eats something a second time, it might not be covered.

Policies may not cover examination fees, limit primary care visits per year, and limit the number of vaccines covered per year.

Moreover, some policies also practice disease exclusion and breed exclusions. "If you are a purebred dog owner, know what diseases run in your breed. You can find this information by looking up the breed club's website and finding the health information on your breed, and once you know that information, check how the policy handles those specific diseases."

You can find this information online easily. Search your dog's bread, for example if your dog is an affenpinscher, go on the Affenpinscher Club of America, click on the breed, and then scroll down to health and wellness to read about what disease they are more prone to.

Are There Any Big Differences Between Dog and Cat Insurance?

The difference between dogs and cats is the diseases each species is more prone to and thus the diseases that need to be covered.

"Cruciate ligament rupture is common in dogs, not in cats. I would not reject a policy for my cat if it didn't cover cruciate ligament repair. Liver shunts are common in small breed dogs but not so common in cats. I would want liver shunt coverage if I was getting a small breed dog, but probably not if I was getting a cat or a Labrador." Hohenhaus explained.

What Other Aspects Should I Check Before Choosing Your Insurance policy?

Dr Hohenhaus recommends asking your veterinarian for an itemized estimate submit that estimates the company for pre approval. In some cases, this will allow the company to pay the hospital directly rather than you paying out of pocket and being reimbursed

If you own more than one pet, it might be worth asking if there is a discount if you insure them all at once. Make sure to double check if the policy has a cap, if it does check whether it is lifetime, annual, or if it's based on a diagnosis.

"A diagnosis is commonly required for reimbursement. This can get complicated when a pet has multiple problems. Be sure you match the diagnosis with the test or treatment.

For example, if your pet has kidney disease and a skin infection, the blood tests would be to evaluate the kidneys and the skin cytology to determine if the infection is yeast or bacteria."

Is Pet Insurance Worth It?

Dr Hohenhuas recommends pet insurance depending on your financial situation: "If you're disciplined enough to save and have about $15k nest egg for your pet, then you do not need pet insurance. That amount will cover most catastrophic illnesses. If you have trouble saving money, then yes, pet insurance is a good investment. But if you have a tight budget, a policy that covers "wellness care" will make it easier for you to budget your limited means".

Other experts in pet care also share the same opinion. Kristen Lynch, executive director at NAPHIA also believes insurance is a good investment, because pets in their lifetime will most likely get illnesses and the cost of veterinary treatment keeps on rising, so after all you will see your return on investment.

She told Newsweek: "My 4 and half year old dog, who has always been a very healthy dog with access to the best vets and best food, recently got an ear infection, he's been on and off antibiotics and the issue is almost gone. But we made several trips to the vet so my insurance has more than paid for itself."

"To me it's more about ensuring my quality of life. Nowadays we live month by month, so it's really about preserving your quality of life and being able to deal with illnesses when they come."

dogs playing with stick
Some insurance companies practice breed exclusions or disease exclusions. Make sure to review the fine policy print before signing up. Getty Images