Pets are family members, which means they need to be cared for in every way. They need food, shelter, love, and, yes, their long-term health needs to be looked after. For many pet owners, though, medical care can be a big expense. So, how can you do right by your pets’ health in a fiscally responsible way?
Pet health insurance, which partially or totally covers costs associated with veterinary care, may offer a solution. According to a 2018 report from the North American Pet Health Insurance Association (NAPHIA), there are more than 2 million pet health insurance policies in force in North America alone, representing a market worth about $1.2 billion. Due to higher veterinary costs, dogs are by far the most commonly covered species, with cats a distant second. Some providers offer coverage for other common pet types, such as small mammals, reptiles, and birds, but NAPHIA members only deal with cats and dogs.
Though personal motivations may vary, the general draw for folks is a reduction in the financial uncertainty surrounding their pets’ care. When you pay an insurance premium and know how much your provider is going to cover for certain services, it’s easier to budget for medical care and avoid the sticker shock of an expensive procedure. Frankly, pet health insurance may also reduce the incidence of “economic euthanasia,” an emotionally painful situation wherein pet owners feel pressured to euthanize an animal because they can’t afford to pay for essential medical care. No one wants to put a value on their pet’s life like that.
Though pet health insurance is increasingly popular, it’s not ideal for everyone. Depending on your situation, it could end up being more expensive than paying a veterinarian out-of-pocket. If you have decent (or better) credit, you may wish to use unsecured credit products such as low APR credit cards or personal loans to address liquidity challenges associated with veterinary expenses.
Factors like your pet’s breed, age, and chronic health conditions could result in higher or lower premiums. If your animals are in good health, your veterinary costs might be minimal until very late in their lives.
What Is Pet Health Insurance?
Pet health insurance is a form of property insurance. In the United States and Canada, policies require you to pay upfront and in full for veterinary care, medicines, and other covered items. After submitting a claim to your insurer, you’re reimbursed for covered costs, subject to your policy’s deductible, coverage amounts, and other factors. Unlike human healthcare, where a doctor’s office or hospital submits claims to insurers on behalf of covered patients, pet health insurance providers typically ask you to submit your own claims. Some veterinary offices may do this as a courtesy or walk you through the process, but that isn’t guaranteed.
Pet health insurance policies may come with benefit schedules that specify the reimbursement, expressed as a percentage, for each covered service. Other policies may provide a flat reimbursement rate, which typically ranges between 70% and 100%, across all covered services. The majority of policies renew annually, with premiums rising – or less commonly, falling – to reflect new health conditions, treatments received in the past year, and other factors.
Who Provides Pet Health Insurance
Pet health insurance comes from three general sources:
- Specialized Pet Insurance Companies. There are at least a dozen specialized companies that offer pet health insurance and other types of insurance for pets in North America. The most popular include Trupanion and Veterinary Pet Insurance (VPI). NAPHIA’s member list is a good place to start if you want to compare these providers.
- Full Service Insurance Companies. Some mainstream insurance companies, such as GEICO, offer pet health insurance directly or through subsidiaries. Others partner with specialized pet insurance companies. For instance, Progressive offers policies through Pets Best.
- Clubs and Nonprofits. The American Kennel Club (AKC) and Cat Fanciers’ Association (CFA) offer special policies to their members and registered pets. Both organizations’ policies are underwritten by PetPartners, a specialty pet insurance company, but can only be accessed through portals on the AKC or CFA websites, or by calling those organizations. ASPCA offers pet health insurance to members through a partnership with Fairmont Specialty Insurance Agency and the United States Fire Insurance Company.
Potential Coverage Restrictions and Limitations
Beyond the varying coverages provided by each of the three plan types, all pet health insurance policies come with some important limitations and restrictions:
- Waiting Period. Every new policy imposes a mandatory waiting period that begins the day you sign up and lasts for 3 to 30 days, depending on the insurer. During this time, you can’t access any of the policy’s benefits. If your pet is injured or becomes ill during the waiting period, your insurer may not cover any related treatment costs, even after the waiting period ends. More comprehensive policies tend to have longer waiting periods.
- Pet Age. Very young and very old pets may not qualify for pet health insurance at all. Companies often won’t initiate new policies for dogs and cats younger than six to eight weeks or older than 14 years, though there may be exceptions. However, as long as they’re signed up by the cutoff age, pets are usually covered until death.
- Pre-Existing Medical Conditions. These are health conditions, such as urinary tract infections (UTIs) and hyperthyroidism, that existed prior to your policy’s initiation. Insurers often refuse to cover costs associated with these conditions. However, depending on your policy, this refusal may only be temporary – for certain conditions. For instance, Embrace Pet Health Insurance’s embargo on reimbursement for gastrointestinal disorders and UTIs expires after 12 months. If your pet is cured of such a condition, makes it through a year with no new symptoms, and experiences a recurrence the following year, Embrace reimburses for treatment. However, other pre-existing conditions, such as diabetes and allergies, are considered permanent and thus never become eligible for coverage.
- Dental Issues. Though preventive care policies generally cover teeth cleaning, few pet health insurance policies cover more complex dental care and oral surgeries. These can be expensive: According to PetMD, tooth extraction procedures cost about $924 per tooth for cats and $829 per tooth for dogs.
- Breeding and Reproductive Health. If your pet is a breeder or will become one in the future, many policies require you to disclose this. Otherwise, your pet may not be covered for injuries, illnesses, and preventive care related to breeding and rearing.
- Novel or Expensive Treatments. Some pet health insurance providers refuse to cover novel, expensive, or ethically questionable treatments. For instance, Embrace doesn’t cover prosthetic limbs, cloning, or elective stem cell therapy. These restrictions vary by insurer.
- Deliberate Injuries and Fighting. Pet insurance policies generally don’t cover injuries deemed by a veterinarian to be deliberate. Such injuries might result from physical abuse by an owner, organized fighting, or racing.
- Neglect. Insurance companies usually require you to provide a basic standard of care for your pet, and they may invalidate or refuse to renew your policy if you fail to do so. For instance, Trupanion requires policyholders to keep current on all vet-recommended vaccines, including rabies, distemper, and feline panleukopenia.
- Burial or Cremation. Few if any pet health insurance policies cover death expenses. However, there may be other types of pet insurance available that do cover these costs.
Factors Affecting Pet Health Insurance Costs
Factors that commonly affect the cost of a pet health insurance policy include the following:
1. Policy Type
There are three major types of pet health insurance policies: accident only, accident & illness, and accident & illness with embedded wellness, also known as wellness/preventative care. Average costs vary for each.
2. Species and Breed
Dogs are generally more expensive to insure than cats, since their veterinary bills tend to be higher. Per NAPHIA’s statistics for 2013, average premiums for cat policies are anywhere from 60% to 90% of those of dogs, depending on policy type. For both species, purebred animals are usually more expensive to insure than mutts, due to a higher incidence of hereditary health problems in purebreds. The actual cost of your pet’s policy depends on the problems known to affect the particular breed. For instance, English bulldogs and Great Danes, both of which are known to be susceptible to a number of hereditary health problems, cost about 60% more to insure than the average dog.
3. Number of Pets on the Policy
If you have multiple pets, your insurance company may offer a premium discount for including them all on the same policy. These discounts vary by insurer, usually from 10% to 50% of each pet’s individual premiums.
4. Payment Frequency
Some pet health insurance policies may offer modest discounts for paying your annual premium upfront and in full, as opposed to making monthly payments. For instance, Embrace Pet Insurance and GEICO Pet Insurance both offer 5% discounts for annual premium payments.
Spayed and neutered pets tend to be cheaper to insure. For instance, Embrace applies an automatic 5% discount to all policies for such pets.
When determining your policy’s premium, pet health insurance companies look at the average cost of care and procedures at veterinary clinics in your area. Vets tend to be more expensive in metropolitan locales and affluent communities, and cheaper in rural areas. However, if you live in a thinly populated area where the few available choices are expensive, your premiums could be higher.
7. Pet Age
Since they tend to be healthier, younger pets are much cheaper to insure than older ones – except very young animals, whose health is more fragile. Insuring young pets also reduces the likelihood that your animal becomes more expensive to insure due to a pre-existing condition. Your exact savings depend on your insurer, policy type, deductible, where you live, and whether you have a bundled or multi-pet policy. Regardless of when you initiate coverage, your policy is probably going to rise in cost as your pet ages and becomes more likely to get sick.
8. Chronic Conditions
The lists pet insurers keep of chronic conditions are similar, sometimes identical, to their lists of pre-existing conditions. The difference is that chronic conditions develop after policy initiation, not before, and therefore qualify for coverage. However, the appearance of a chronic condition, like asthma or cancer, may result in a premium spike when you next renew a policy.
A deductible is the annual out-of-pocket amount you’re responsible for paying before your policy’s coverage kicks in. Higher deductibles correspond to lower premiums and vice versa.
10. Reimbursement Caps
Policies sometimes cap reimbursements for certain conditions on a per-incident, annual, or lifetime basis. Others place an annual cap on total reimbursements across all coverages. If you anticipate needing a lot of care for your pet, you should look either for a policy with no caps or very high ones. Note that more generous or unlimited policies are more expensive than those with lower caps, with the exact difference varying by company and policy.
11. Bundling With Other Policies
If your pet health insurance provider also offers other types of insurance, you may be able to secure a discount by bundling with another policy. This is most frequently done with homeowners or renters insurance policies.
12. Services Used
If you make a claim on your pet health insurance policy, your insurer may raise your premiums at the next renewal date, regardless of what the claim was for.
Policy Types and What They Cover
Pet health insurance policies come in three basic types:
1. Accident Only
This only covers veterinary costs associated with unexpected injuries, such as those caused by falls or vehicles, including emergency surgeries. According to NAPHIA, the average annual premium paid on an accident only policy for dogs is about $166.
- Monthly Premium: Starting as low as $3 per month, but varying widely depending on location and the age and breed of the animal
- Deductible: Ranges from $0 to $1,000 per year, with $200, $500, and $1000 being the most common
- Reimbursement After Deductible: 70%, 80%, or 90% for all covered treatments
- Annual Payout Limit: $2,500 to $20,000
- Lifetime Payout Limit: $10,000 to $200,000
2. Accident and Illness
This covers costs associated with accidents as well as acquired or inherited illnesses, infections, and other detrimental changes to your pet’s health. Example coverages include cancer treatments, diagnostic imaging, physical rehabilitation, and many surgeries. Per NAPHIA, the average annual premium for an accident and illness policy for dogs is $457.
- Monthly Premium: Starting as low as $15 per month, but varying widely depending on location and the age and breed of the animal
- Deductible: $100, $250, or $500 per year
- Reimbursement Percentage After Deductible: 70% to 100%
- Annual Payout Limit: $2,500 to unlimited
- Lifetime Payout Limit: Starting at $10,000 for low-premium policies, but many policies have no limit
3. Wellness/Routine and Preventative Care
This is the most comprehensive type of pet health insurance policy, covering costs arising from accidents, illnesses, and infections, as well as preventive care, checkups, and medications. Examples of non-accident, non-illness coverages include vaccines, teeth cleanings, prescription diets, and spaying or neutering. Per NAPHIA, the average annual premium for this policy type is $1,178.
- Monthly Premium: Starting as low as $40 per month, but varying widely depending on location and the age and breed of the animal
- Deductible: $0 to $500
- Reimbursement Percentage After Deductible: 80% to 100%
- Annual Payout Limit: $5,000 to unlimited
- Lifetime Payout Limit: Starting around $20,000 for low-premium policies, but many policies have no limit
Example Pet Health Insurance Policies for Dogs
Given all the potential restrictions and limitations on your pet insurance policies, not to mention the additional factors that could affect their total cost over time, it’s impossible to say with certainty how much you’re going to pay for your pet’s coverage. What follows is a look at costs and conditions for popular dog health insurance policies, noting how much three common procedures would cost under each one. As of 2010, according to Veterinary Pet Insurance, the average out-of-pocket costs of these procedures in the U.S. are as follows:
- Benign Skin Mass Removal: $999. Would be covered by accident & illness and wellness/routine preventative care policies.
- Skin Abcess or Ulcer Treatment: $458. Would be covered by accident & illness and wellness/routine preventative care policies.
- Torn ACL: $2,667. Would be covered by all three policy types.
The following three policies represent examples from each broad category. The quoted monthly premiums are for a neutered two-year-old border collie male, but quotes vary based on your pet’s breed, age, and other factors.
Along with each policy, except accident only, is a cost range for the procedures. These costs depend on the deductible, reimbursement rate, and payout limit of the policies, and they assume it’s the first claim you make in a given year. For accident only, the cost of a torn ACL is the only applicable procedure, since the other two aren’t accident-related.
Accident Only Policy: Pets Best Accident Only
This plan covers general trauma, poisoning, bites, vehicle accidents, foreign body ingestion (including any necessary surgeries), lacerations, fractures, and torn nails. It’s open to all dogs over seven weeks of age.
- Monthly Premium: $3 to $30, depending on deductible, reimbursement, and limits
- Cost of Torn ACL: $467 to $1,500
Accident & Illness Policy: ASPCA Pet Health Insurance Basic
All levels of this plan cover the same types of accidental injuries described in the Pets Best plan, plus illnesses related to chronic conditions, such as UTIs. More expensive levels of the plan cover hereditary (breed-specific) conditions, alternative treatments, and behavioral issues.
- Monthly Premium: $17 to $62, depending on deductible, reimbursement, and limits
- Cost of Benign Skin Mass Removal: $190 to $650
- Cost of Skin Abcess or Ulcer Treatment: $135 to $458
- Cost of Torn ACL: $357 to $1,150
Accident, Illness & Wellness Policy: Embrace Creme de la Creme
This policy covers everything included in the ASPCA Pet Health Insurance Basic policy, plus a $200 or $400 allowance to spend on wellness treatments like spaying and neutering, blood and feces exams, parasite prevention, microchipping, and dental work.
- Monthly Premium: $45 to $120, depending on deductible, reimbursement, and limits
- Cost of Benign Skin Mass Removal: $100 to $600
- Cost of Skin Abcess or Ulcer Treatment: $46 to $458
- Cost of Torn ACL: $267 to $933
Example Pet Health Insurance Policies for Cats
I sought monthly premiums for popular cat policies, as well, using a neutered two-year-old domestic shorthair male as my control. Again, your policy’s monthly premiums may vary based on your cat’s age, breed, and other factors. The average out-of-pocket U.S. cost of treatment for three common feline medical problems in 2010, per Veterinary Pet Insurance, was as follows:
- Bladder Stones: $985. Would be covered by accident & illness and wellness/preventative care policies.
- Malignant Skin Mass: $1,508. Would be covered by accident & illness and wellness/preventative care policies.
- Multiple Bite Wounds: $266. Would be covered by all three policy types.
Accident Only Policy: Pets Best Accident B
This policy covers the same set of accidental injuries as the Pets Best Accident Only Plan for dogs. Note that bladder stones and malignant skin mass are not covered on this policy type.
- Monthly Premium: $4 to $21, depending on deductible, reimbursement, and limits
- Cost of Multiple Bite Wounds: $27 to $266
Accident & Illness Policy: PetPlan Family
This policy is similar to ASPCA Health Insurance Basic, but comes with the option to add up to $500 in kenneling coverage and $500 to cover rewards for finding a lost pet.
- Monthly Premium: $15 to $45, depending on deductible, reimbursement, and limits
- Cost of Bladder Stones: $50 to $357
- Cost of Malignant Skin Mass: $50 to $462
- Cost of Multiple Bite Wounds: $50 to $213
Accident, Illness & Wellness Policy: Trupanion Premium
This policy covers everything in the PetPlan Family policy, including kenneling and rewards. It also covers alternative therapies, including acupuncture and other holistic treatments, and routine care like vet checkups. In addition, it comes with an optional pet owner assistance package, which may cover final expenses, like cremation and burial. There’s no lifetime payout limit, a significant advantage.
- Monthly Premium: $23 to $51
- Cost of Bladder Stones: $99 to $985
- Cost of Malignant Skin Mass: $151 to $1,051
- Cost of Multiple Bite Wounds: $27 to $266
Alternatives to Pet Health Insurance
After reviewing the above numbers and conducting your own research, you might come to the conclusion that pet insurance isn’t right for your situation. If so, consider exploring these alternatives:
1. Consider Breeds With Few Health Problems
Some pure breeds have higher rates of hereditary illness and acquired health problems than others (or mutts and rescues in general). For instance, pugs and Persian cats tend to develop respiratory problems due to their compact nasal structures. Corgis and Portuguese water dogs may be at risk for congestive heart failure. The American Kennel Club publishes a comprehensive list of breed-specific health problems for dogs.
While no pet breed is immune from health problems and no pet lives forever, buying or adopting an animal with few known issues – particularly a rescue or animal shelter mutt – might reduce the likelihood of purebred-related health issues, and therefore reduce your lifetime care costs. Working dogs, such as border collies and Australian cattle dogs, tend to be more robust. For felines, a common, unspecialized breed like domestic shorthair cats have relatively few hereditary issues. In general, smaller dogs and cats tend to live longer – chihuahuas can reach 15 years or beyond, compared to 10 or 11 for Labs.
2. Invest in a Pet Savings Plan
A pet savings plan can be as simple as an FDIC-insured savings or money market account that holds funds earmarked for pet care. To create one on your own, start as early as possible in your pet’s life. Calculate the annual cost of its routine care – vet visits, vaccinations, food, long-term medications and supplements, and so on. Figure out how much you need to set aside each month to reach this amount, plus a reasonable buffer – say 10%.
Then, research costs for non-routine care, such as common surgeries and treatments for breed-specific conditions that your pet could be at risk for. If you estimate that your pet requires $3,000 in non-routine care over a predicted 10-year lifespan, saving $300 per year from age one would get you to that goal. It’s impossible to know what’s going to happen in the future, and costs tend to rise over time, but it’s always easier to save more when you start earlier.
3. Seek Financial Assistance
Pet owners can tap numerous financial assistance nonprofits such as the Pet Fund for help paying expensive vet bills. These organizations accept applications from owners who face a dire choice between treating an expensive condition, like cancer, and euthanizing their pet – or even forgoing treatment and allowing the pet to succumb. This route may not be appropriate, though, and success isn’t guaranteed: There’s typically a significant wait for funding and organizations typically don’t offer assistance for emergencies.
Of course, you can also solicit donations from friends and family members for help covering the cost of a serious injury or illness. Crowdfunding campaigns are increasingly common for pet owners with compelling stories, as well.
4. Work Out a Payment Plan With Your Vet
Many veterinarians and animal hospitals offer weekly or monthly payment plans on a case-by-case basis. Some have in-house payment plans, while others participate in a veterinary credit program like Care Credit or Citi Health Card. Make sure you understand the details of any plan, including your interest rate and repayment term, before agreeing to it.
5. Use a Discount Plan
Pet Assure is a lot like :DentalPlans, just for pets instead of people. It offers discounts on veterinary care, medications, and certain products and services. Covered vet services include office visits, in-office diagnostics, vaccinations, and surgeries. They do not, however, include lab work or diagnostics that require a third party. Covered products and services include pet sitting, grooming, training, books, and prescriptions – including prescription food. Veterinary discounts are 25% across the board, with product and service discounts ranging from 5% to 50%, depending on the product or service and provider.
6. Try Hospice Care for Terminally Ill Pets
If your pet develops a serious illness, aggressive treatment may become expensive, ineffective, or both – not to mention stressful for your pet. Hospice care may be a more affordable and humane option than euthanasia, particularly if your pet is in a lot of pain. The International Association for Animal Hospice and Palliative Care has resources for pet owners considering a course of treatment that manages pain and promotes comfort at the end of their pets’ lives.
7. Set Up a Dedicated Savings Account
In an ideal world, you’d have three different types of savings: personal, emergency, and retirement. I’m a big proponent of goal-oriented savings as well. My wife and I have a handful of small savings accounts to which we regularly contribute funds earmarked for specific projects and goals, like travel and home improvement. If your pet means the world to you, why not set up a dedicated savings account to cover expenses related to their care?
8. Use a Revolving or Installment Loan
Taking out a loan to cover pet health expenses isn’t the end of the world, particularly if your credit is in good shape. Consider an unsecured personal loan, low APR credit card, or home equity line of credit – whatever fits best with your credit profile, budget, and lifestyle.
Consciously or unconsciously, many caring pet owners are forced to place a monetary value on the lives of their animals. Though it would be nice to be able to devote unlimited resources to pet care, keeping your dog or cat healthy and happy can’t come at the expense of your own well-being, or your family’s.
Pet health insurance may offer a solution that allows you to deliver uncompromising care without stretching your budget too far. However, it’s not a miracle cure for pet-related financial issues – and in many cases, it might cost more than paying out-of-pocket. It’s up to you to assess your pet’s health and risk factors, evaluate your insurance options, and determine whether it makes sense to take out a pet health insurance policy for your companion.
Do you have pet insurance?