I started Insurance Blog by Chris™ because I have a passion for insurance. Here at the blog, our job is to educate and inform people about the best insurance for them. Since then, we have grown into national brands with a large team of researchers helping people understand all forms of insurance.

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Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insu...

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Reviewed by Rachael Brennan
Licensed Insurance Agent

UPDATED: Apr 14, 2021

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When it comes to pets – dogs and cats, in particular – they aren’t just like family, they are family.

According to the American Pet Products Association, more than two-thirds of Americans own at least one pet, which is the equivalent of 84.9 million households.

Of these, roughly 80 percent own a dog and approximately 50 percent own cats.

As with any living creature, pets can experience health issues over the course of their lives, whether these are fairly common – such as an ear infection or kennel cough – to quite serious, like a broken bone or potentially life-threatening conditions such as cancer.

That’s where pet insurance comes into play.

Table of Contents:

What is Pet Insurance?

What health insurance is to humans, pet insurance is to animals, as it covers at least some of the cost of treatment for a fee, the premium of which is usually paid on a monthly or annual basis.

Pet insurance rates can vary on many different things, including location, breed, age, and any prior health issues.

In the average year, pet parents in the U.S. spend a combined $18 billion in veterinary care, according to the APPA.

Without pet insurance, owners usually must come up with the cost completely out of pocket.

And depending on the treatment required for the health episode in question, the cost can be considerable, in the thousands if not tens of thousands of dollars.

For cases in which the cost is too high and the health condition too serious, pets may tragically need to be euthanized because paying for the treatment isn’t feasible.

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How Does Pet Insurance Work?

Pet insurance can help solve these financial predicaments by reimbursing pet parents for their expenses, minus the deductible.

Based on the most recent statistics available from the North American Pet Health Insurance Association, roughly 2 million pets were insured in North America in 2017, up nearly 17 percent from the previous year. In the U.S. the specific total was 1.83 million, and 244,000 in Canada.

Unlike health insurance, which is required in certain states, pet insurance is not a mandatory purchase.

However, much like health insurance, it can offer a great deal of peace of mind by expanding dog and cat owners’ financial capacity when pets encounter an illness, broken bone, or other situation that may require an invasive procedure to resolve sufficiently.

What Does Pet Insurance Cover?

Here is a brief, non-exhaustive list detailing some of the things that pet insurance may cover, whether partially or fully:

  • Extraction of foreign bodies or objects
  • Poisoning
  • X-rays
  • Certain immunizations
  • Dental care
  • Broken limbs
  • Lacerations
  • Torn ligaments
  • Cancer
  • Chronic conditions (e.g., arthritis, diabetes, allergies, etc.)

The comprehensiveness of pet insurance largely depends on the type you obtain.

Types of Pet Insurance

According to the North American Pet Health Insurance Association, there are four basic types of pet insurance:

  1. Accident-only
  2. Accident and illness
  3. Insurance with embedded wellness
  4. Endorsements

Accident Only

As its name more or less implies, accident-only covers various scenarios that occurred as a result of misfortune or happenstance, such as if your pet was hit by a vehicle, pulls a muscle, or swallows something he or she shouldn’t have.

Accident and Illness

Accident and illness pairs coverage of mishaps with insurance that pays for certain illnesses, such as cancer, eye and ear infections, or skin problems like dermatitis or poison ivy.

Accident and illness is the most common type of coverage in the U.S., accounting for an estimated 98 percent of pet policies, based on estimates from the NAPHIA.

Insurance with Embedded Wellness

The third type, insurance with embedded wellness, traditionally addresses the financial ramifications of ongoing health concerns. In addition to the scenarios and treatments previously referenced, it may also cover things like vaccinations, dental care, or medication for fleas and ticks.

Endorsements

Finally, endorsements serve as add-ons to another policy. For example, if you have homeowners insurance, your provider that offers more than one line may also make pet insurance available as something you can tack on to your homeowners policy.

What these endorsements actually cover – and for how much – can vary considerably. Endorsements may also be referred to as riders.

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Pros and Cons of Pet Insurance

As with virtually any purchase you make, pet insurance comes with many positives and negatives.

Understanding what they are can help you make the right decision that’s best for your pet, as insurance is highly customized and conditional on their situation.

Pros

  • Helps Reduce the Cost of Medical Care: The most obvious perk to pet insurance is from a financial standpoint. In a way, pets are like children – they can encounter wellness issues at any time, and the cost of treating them can be substantial. Without coverage, the expense must be paid for entirely out of pocket. An annual or monthly premium enables pet parents to better absorb unexpected medical bills.
  • Provides Peace of Mind: There’s a certain comfort in knowing that pet insurance will pay a portion or the entirety of a medical bill. For many, this rest assurance is priceless and fully justifies the premium paid.
  • Flexibility: As previously referenced, pet insurance comes in various types, some fairly bare-bones, while others are comprehensive. This enables you to have more options for which coverage is best depending on your financial situation and your dog or cat’s breed. Some breeds may be more vulnerable to certain types of diseases or age-related decline.
  • You’ll Be Reimbursed the Cost of Treatment: No matter how much you love your dog or cat, no one wants to face an expensive medical bill. The financial pain is only for a short period, however, as you’ll be reimbursed by your insurer up to the limits of the policy and minus the deductible.
  • Pick of the Litter for Vets: You’ll be hard-pressed to find a veterinarian that does not accept pet insurance or one that only accepts certain types. Thus, if you’ve grown to prefer a particular pet over another, you won’t have to worry about switching providers.
  • Can Save You Thousands: As technology has improved and the cost of medical care increased, so too have insurer benefits. Some of the treatments insurers did not cover a few years ago are now fully covered. They may also pay for a larger sum of health care costs on an annual basis, potentially saving you thousands if your pet encounters one or several serious injuries or illnesses.

Cons:

  • Premiums Can Be Expensive: Depending on the type of pet insurance you buy, annual premiums may be higher than you anticipate. According to the NAPHIA, the average annual premium in 2017 for accident and illness pet insurance was $516.
  • Policy May Not Cover Health Issue in Question: Pet insurance comes in various packages – what’s considered “comprehensive” for one provider may not meet your definition of all-inclusive. For example, while some pet insurance policies pay for wellness visits, most do not, according to the NAPHIA. Similarly, common congenital conditions, such as hip dysplasia, are rarely if ever covered.
  • May be Required to Pay Full Price Upfront: When you need to see the doctor and have health insurance, you may only need to come up with the co-pay, which is due prior to seeing your physician or in the immediate aftermath. But when your pet goes to the vet, don’t be surprised if you’re asked to pay for the bill in its entirety, and you will be reimbursed later on.
  • Usually Doesn’t Cover Pre-Existing Conditions: If you have a middle-aged pet who already has a health issue prior to your getting pet insurance, treatment for that issue will likely not be paid for by your insurer. Getting any policy will be more difficult than insuring a younger animal.
  • There’s a Ceiling to the Amount Covered: Just because you have pet insurance doesn’t mean your medical bills will be offset in perpetuity. In other words, most policies have a maximum annual benefit, so you may be forced to come up with the entirety of a procedure or treatment if the benefits for that year have been exhausted.

How Do I Find Pet Insurance?

The internet has helped make locating a pet insurance provider and policy relatively simple.

From Embrace, to Pets Best, to Trupanion to Hartsville and more, pet insurers run the gamut.

Many traditional homeowners insurance companies also sell pet insurance, such as Nationwide and Allstate.

So, Is Pet Insurance Worth It?

No one loves you more than your pet. You can return the favor by securing the pet insurance policy they need to address health issues as they come up.

Find out more about this coverage and many providers that put your four-legged companions first.