When 'pet insurance makes the most sense,' according to an expert — and how much it costs

Americans spent $29.3 billion on veterinary care last year. Insuring your dog or cat can help.


There are plenty of types of insurance policies you buy for peace of mind but never expect to use. A medical policy for your dog or cat is not one of them.

"Pets will get ill and have accidents," says Kristen Lynch, executive director of the North American Pet Health Insurance Association (NAPHIA). "This isn't like fire insurance that you buy and then hope to never use. You'll use pet insurance. It's part of being proactive and planning ahead."

But most American pets are uninsured. As of 2019, U.S. pet owners had coverage for just over 2.6 million dogs and cats — a fraction of the animals that live in the nearly 85 million American households that own at least one pet. Last year, Americans spent $29.3 billion on veterinary care.

"Pet insurance makes the most sense when your pet is young and the premium is a lower cost to you," Brittney Castro, a CFP and the founder of Financially Wise Women, told CNBC. "It can definitely help you pay for any medical expenses that might come along during their lifespan."

Unless you suspect you've adopted an invincible pet, it's worth weighing the potential costs and benefits of pet insurance. Here's what to consider.

What pet insurance costs

Monthly pet insurance premiums for policies covering accident and illness average about $49 for dogs and $29 for cats, according to NAPHIA.

Premiums will vary based on the amount of your deductible and the level of coverage. Some policies only cover accidents, which include incidents such as foreign body ingestion, lacerations, car accidents, ligament tears, and poisoning. The much more common "A&I" policies cover treatment related to accidents as well as illnesses such as cancer and diabetes.

The quote you receive will be based on the breed and age of your pet, as well as your ZIP code (as veterinary coverage in your area may be more or less costly than in other regions). Depending on these factors, your monthly premiums could be as low as $25 or as high as $150, says Rob Jackson, co-founder and CEO of pet insurer Healthy Paws.

Pets will get ill and have accidents. This isn't like fire insurance that you buy and then hope to never use. You'll use pet insurance. It's part of being proactive and planning ahead
Kristen Lynch
Executive Director, NAPHIA

What pet insurance covers

Unlike your health-care policy, pet insurance typically won't cover routine preventative care or medication. "Preventative care is part of being a responsible pet parent," says Jackson. "It would be like insuring oil changes for your car." What pet policies do cover, he says, are "unexpected and un-budgetable" expenses that can crop up in the case of illness or injury to your pet.

And without insurance, those costs can get steep. If your new puppy eats a foreign object — a common problem, says Jackson — you could be looking at a $4,000 charge to get the item surgically removed. You could pay $4,000 to $5,000 for surgery if your animal needs a ligament repaired, Jackson says. If your animal needs to go to the hospital, a series of diagnostic tests alone can run you a couple grand, and a weeklong stay at a veterinary hospital can come with a $20,000 bill, he says.

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In the case of an accident or illness, a policy will cover all or a portion of initial and ongoing treatment, as well as any medications your pet needs as a result.

One major exception: Policies won't cover treatment for preexisting conditions whose symptoms have manifested before you purchased the policy. If you own a dog breed that's susceptible to hip dysplasia, for instance, you can get coverage if your dog is a puppy and showing no symptoms, though there may be a waiting period of up to a year to allow for symptoms to emerge. If your dog already has signs of hip dysplasia when you purchase the policy, though, treatments for the disorder won't be covered.

How to shop for a pet insurance policy

To find a policy that's right for you and your pet, start by talking to your veterinarian about what illnesses your animal may be susceptible to. This will help determine the amount of coverage you need, says Lynch, since policies may put a dollar limit on coverage or a cap on incidents in a given year.

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Jackson recommends opting for a plan with unlimited lifetime benefits, no caps on treatment or incidents, and a reimbursement policy based on your invoice for treatments, rather than one that estimates the cost of a given treatment based on a predefined benefit schedule. "You don't want to pay $3,000 for a treatment and then be told, 'It's usually less, so we're only covering 80%,'" he says.

You can find a list of member insurers, along with a guide to buying a policy and making claims on NAPHIA's website. You can find pet insurance comparison tools at PetInsuranceReview.com and PetInsuranceQuotes.com. Don't trust the boasts on any single pet insurer's website.

"No matter whose site you go on, they're going to make it look like they have the best deal," says Jackson.  

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