Choosing your own health insurance plan can be complicated—do you really need an insurance plan for your pet too? Learn the pros and cons and if pet insurance is right for your family.

What Does Pet Insurance Cover?

Just like human health insurance, pet insurance covers medical expenses for pets. Most companies will cover dogs and cats, but you can find coverage for most pets if you shop around. There are three common types of pet insurance plans:

• Accident-only plans cover unexpected injuries and ingestion. That includes cases like car accidents, broken bones, torn ligaments, and ingesting poison or a foreign object.
• Accident and illness plans or comprehensive plans cover accidents and both minor and major illnesses ranging from infections to cancer.
• Routine wellness plans or preventative care plans are typically an add-on to comprehensive plans that cover basic expected healthcare costs like checkups, vaccinations, spays and neuters, and sometimes dental care.

You should also know what most pet insurance plans DON’T cover, including:

• Breeding and pregnancy
• DNA testing
• Cosmetic procedures
• Elective procedures
• Experimental treatment
• Any accidents or injury caused by racing, fighting, cruelty, or neglect

These are general guidelines to help narrow down what kind of plan you’re looking for, but you should always check what a specific pet insurance plan covers because the terms will vary from company to company.

Most pet insurance plans don’t cover pre-existing conditions, but some will cover a condition that’s in remission if you can show that your pet hasn’t shown any symptoms for a length of time (typically 6-12 months). Even for accidents and illnesses, most plans have a waiting period before your pet insurance coverage kicks in. That means that if your plan has a 14-day waiting period and your pet requires a vet visit in that two-week window, the cost will not be covered.

How Does Pet Insurance Work?

Unlike human health insurance, most pet health insurance plans will have you pay the vet bill up front and pay you back later. The terms vary from plan to plan, the way that pet insurance reimbursement works most often is that you pay all medical and exam fees out of pocket and then submit a claim for reimbursement to your insurance company. Some vet offices will partner with larger insurance companies to bill your insurance directly, allowing you to just pay your portion without having to wait for reimbursement.

Another difference between human health insurance and pet insurance is that you don’t have to worry about veterinarians being “in network.” You can take your pet to see almost any medical professional for treatment that’s covered by your plan and submit a claim—they don’t need to have a relationship with your insurance company.

Terms to Know When Choosing a Pet Insurance Plan

The technical language used to describe a pet insurance plan can make it difficult to know exactly what you’re looking for! Here are the basics that you should know to help you find the best pet insurance plan for you:

• Premium: Pet insurance premiums are the amount you pay each month for coverage. Low monthly premiums may make regular payments easier, but they typically result in more out-of-pocket costs on vet bills.
• Deductible: Your insurance deductible is the amount you have to pay out of pocket before your insurance coverage kicks in. You may have a per-incident deductible that applies to each individual bill or an annual deductible that applies to all your bills combined for the year. A low premium typically results in a higher deductible.
• Coinsurance/reimbursement percentage: Many insurers will only cover a certain reimbursement percentage of costs (80% for example), leaving the pet owner to pay coinsurance—the remaining balance of the bill (20% in this case). Lower coinsurance payments usually result in a higher premium.
• Annual limit/policy limit: Most plans have a maximum amount they will pay for your pet’s care in a year. Once you exceed that limit, you become responsible for all costs for the rest of the year. Some plans offer higher annual limits or even unlimited plans, but they come with a higher premium.

These terms will help you calculate the basic costs that you can anticipate paying for your pet’s care. You can find more pet insurance terminology here.

Pet Insurance Costs

The average cost for accident and illness coverage in the U.S. in 2021 was $49 per month for dogs and $29 per month for cats according to the North American Pet Health Insurance Association. Adding routine wellness coverage typically costs an extra $20-$25 per month. These numbers can provide a benchmark of what to expect, but your costs can vary depending on many factors, including:

• Your location
• Your pet’s species and breed
• Their age
• Their size
• Their health
• The coverage of your plan
• The company you choose

You can shop around for a plan that best suits your needs. Many large companies that are known for insurance for humans also have options for pet insurance, like Geico Pet Insurance and Nationwide Pet Insurance. There are also many dedicated pet insurance companies, like Spot, Lemonade, and Trupanion. Get pet insurance quotes from multiple companies to find coverage that suits your pet and your budget.

Is Pet Insurance Worth It?

Every pet parent’s lifestyle and financial situation is just as unique as their pet, meaning that pet insurance is a great fit for some families and not for others. However, pets’ medical costs can easily stack up into the thousands in serious cases, and you should have a plan for how to handle those expenses.

Investing in pet insurance can be a good safety measure to cover expenses if your pet is unexpectedly sick or injured. It can also be a good way to prepare for any conditions you can expect down the road. Certain breeds are more prone to issues like breathing problems or hip dysplasia and will likely require special medical care. Your dog’s risk of medical complications rises as they age as well, meaning that investing in insurance coverage while they’re young can pay off in their senior years.

On the other hand, people with extremely healthy pets may invest in pet insurance for years and hardly utilize their coverage! That’s a best case scenario of course, but it can feel like a frustrating waste of money. In the worst case scenario, you might spring for an insurance plan with a low annual limit and then be suddenly confronted with massive medical bills that your insurance won’t cover if your pet gets a serious diagnosis.

Some pet owners prefer the certainty of regularly putting aside money in a dedicated savings account for their pet rather than buying into a pet insurance plan. That way you get to hold on to your money and have more flexibility in how you spend it, but you are limited by how much you have saved. With pet insurance coverage, you could get thousands of dollars in claims covered after paying a single monthly premium.

Pet insurance might not be right for everyone, but knowing your options and preparing for every eventuality means that you’re doing the very best you can for your best friend. You’ve got this, pet people.