Pet insurance is a safety net that can cushion the financial blow of unexpected veterinary bills. It can help pay for emergencies or sometimes even things like dental care or prescription food. But pet insurance also adds an additional monthly or annual cost you need to include in your budget.

Is pet insurance worth it? Only you can answer that question, but it helps to know how pet insurance works, what is covered and the overall financial implications.

How pet insurance works

Many of us consider our pets family members, but they are considered property legaly. This means pet insurance is more like car insurance than human health insurance.

Choose a plan

Pet insurance plans offer different levels of coverage and types of options depending on your choice.

The most common are comprehensive plans that cover accidents and illnesses. These are sometimes called “nose-to-tail” policies. Some pet insurance companies also offer routine or preventive care packages and other add-ons that increase what is or isn’t covered.

Before settling on an insurance plan, you should compare what different providers offer. Read the fine print because that’s where details like waiting periods and limitations are.

Pay your premiums

Premiums are determined based on factors like your pet’s age and breed, which state you live in and how much coverage you want. You’ll need to look into monthly and annual premiums and ensure you budget for them accordingly.

For accident and illness plans, dog owners paid an average of $675.61 in 2023 or $56.30 per month. Cat owners were set back $383.30 per year or $31.94 monthly.

Get treatment

In most cases, you must pay the vet upfront when you take your pet in for treatment.

Before you leave the vet’s office, put together the paperwork to file a claim. This generally includes an invoice or receipt and a form filled out and signed by your vet. You can do this later, but it’s easier if you do it right away.

File the claim

Filing a claim may look different from one insurer to the next.

Some pet insurance companies have apps or online portals making submissions quite easy and efficient. Others might request the paperwork via email or even fax.

The processing time can vary from a few minutes to around 30 days. Again, this will depend on your insurer’s process.

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If your insurer offers direct vet pay, it will pay the vet directly, leaving you with no out-of-pocket expenses besides your deductible and co-insurance. Note that even if your insurer offers direct vet pay, not all vets accept payment this way.

Wait for reimbursement

If your claim is approved, the insurer reimburses you for the covered expenses. Your reimbursement amount depends on your policy’s terms, including the reimbursement rate and the deductible you agreed on when you bought the policy.

For example, if your policy covers 80% of costs and you have a $100 deductible, you would receive 80% of the vet bill after subtracting the deductible.

You will typically receive your reimbursement via direct deposit or check, depending on your preferences and what you agreed on with your insurer.

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What pet insurance covers

Pet insurance covers a range of issues, depending on your plan. However, most plans cover some or all of the following:

    • Bite wounds
    • Cuts and lacerations
    • Fractures
    • Injuries from car accidents
    • Poisonings
    • Blood tests
    • Lab tests
    • MRIs
    • Ultrasounds
    • X-rays
    • Allergies
    • Cancer treatments
    • Chronic conditions (such as diabetes or arthritis)
    • Gastrointestinal issues
    • Infections (such as ear infections or urinary tract infections)
    • Allergy medications
    • Antibiotics
    • Long-term medications for chronic conditions
    • Pain relievers
    • Prescription medications
    • Emergency surgeries (such as foreign object removal)
    • Orthopedic surgeries (such as cruciate ligament repair)
    • Soft tissue surgeries
    • Tumor removals

Pay extreme attention to the details of what is and isn’t covered in your policy. There is no cookie-cutter format from one comprehensive plan to the next. The same goes for accident-only plans and preventive add-ons.

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Keep in mind: Many pet insurance companies offer customizable coverage, meaning even more policy variation.

What pet insurance doesn’t cover

Pet insurance comes with many exclusions, which vary from one policy to the next. Here is a list of things typically not covered by a comprehensive pet insurance plan. Remember that some providers might still offer some coverage even if most don’t.

    • Behavioral modification programs
    • Training
    • Conditions known to be common in specific breeds, like hip dysplasia in large dogs
    • Hereditary conditions in certain breeds (unless covered by specific plans
    • New or alternative therapies not covered by the policy
    • Treatments that are not widely accepted or proven
    • Cosmetic surgeries (e.g., ear cropping, tail docking)
    • Declawing
    • Non-essential cosmetic treatments
    • “Curable” pre-existing conditions
    • Chronic illnesses diagnosed before policy initiation
    • Conditions your pet had before the start of the policy
    • Annual wellness exams
    • Dental cleanings
    • Flea, tick, and heartworm prevention
    • Spaying/neutering
    • Vaccinations
    • Exotic pets and horses
    • Newborn puppies
    • Working animals

For many of these items, you can buy coverage as an add-on.

Though not typically covered, a few insurers offer policies that cover exotic pets, horses, working animals, breeding dogs and newborn puppies. These policies may come with a hefty price tag.

Cost of vet care with insurance vs. without insurance

Owning a pet is expensive. Owning a dog or a cat can cost you up to $5,000 per year. Not having insurance can add thousands to that amount, which you would have to pay out of pocket with zero reimbursement.

Below are a few examples of the average costs you can expect to pay for vet care (for a large dog) with and without insurance.

Routine vet visits
Without insurance Routine check-ups cost $100–$150.
With insurance Coverage for routine care varies, but wellness plans or vet visit add-ons may cover these costs.
Wound treatment and repair
Without insurance Wound treatment and repair can range from $1,000–$2,000.
With insurance Insurance can cover 70 percent to 100 percent of these costs after the deductible, significantly reducing out-of-pocket expenses.
Surgery
Without insurance Major surgeries can cost between $2,000 to $5,000.
With insurance Depending on the plan, out-of-pocket costs could be reduced by thousands of dollars.

Other ways to pay for veterinary costs

If you think pet insurance isn’t worth the expense, you may want to consider alternative ways to pay for veterinary costs.

Pet savings account

Setting up a dedicated pet savings account is a practical alternative to pet insurance. By regularly saving a set amount each month, you can build a financial cushion for routine care and emergencies.

Medical credit card

Some credit cards are designed for medical expenses, including veterinary services. These cards offer various financing options, such as no-interest plans if paid within a specified period or extended payment plans. This allows you to manage high-cost treatments by spreading payments over time.

Be aware of the terms, as deferred interest can accumulate if the balance isn’t paid off within the promotional period.

Car insurance

If you have car insurance, you might already have some coverage for Fido. Check your policy or ask your broker about this. Companies like Progressive and Metromile could pay up to $1,000 for pets injured in a car accident, which can soften the financial blow of an unexpected vet bill.

Employee benefits

Ask your employer if your workplace offers pet benefits like pet insurance. Many pet insurance companies offer employers discounts and benefits.

Pet loans

Getting a pet loan can be a good solution for certain people. A loan can give you access to the funds you need to make sure you can give your pet the best care possible.

However, there are pros and cons to consider when taking this route. Do your homework and make an informed, financially sound decision.

How to decide if pet insurance is right for you

The younger and healthier your pet is, the more it makes sense to insure them because you can avoid pre-existing condition exclusions and pay lower premiums. Older dogs with existing health issues might face higher costs or limited coverage.

Another key consideration is your pet’s breed. Especially when it comes to dogs. Many breeds are prone to specific conditions that may not be covered by insurance or will result in higher premiums if you decide to insure them. Understanding the exclusions for your pet will help you decide if the cost of insurance is worth it.

Your financial situation also comes into play. Assess your ability to cover unexpected vet bills out-of-pocket and take it from there. You can start by creating a pet care budget to determine if insurance fits your financial plans. Compare plans and providers to find the best for your needs and budget. Educate yourself on your policy and its premiums, deductibles, reimbursement rates and coverage limits.

If you decide pet insurance is worth it, your next step is to research the best pet insurance companies and what each has to offer.