In the event of an emergency, insurance coverage kicks in to protect an individual or household against significant financial loss that would be difficult to pay out of pocket. So long as the premium, or the cost of insurance, is paid, an insurance company promises to cover certain expenses related to health care, death, disability or illness, or damage to property like a vehicle or a home. When most consumers think about insurance policies, these common financial pitfalls come to mind. However, in recent years, pet insurance has become a booming business for those with a dog, cat, or other two- or four-legged member of the family.
In America alone, the ASPCA estimates that there are 78 million dogs and 85.8 million cats kept as family pets, representing nearly 50% of all households. While pets add love and companionship to their owner’s life, they can be costly to keep in good health – that’s where pet insurance comes in. To understand if pet insurance is worth the cost each month, it’s helpful to know exactly how much owning a family pet costs each year compared to the cost of the pet insurance coverage.
How Much Does a Dog or Cat Cost?
Adding a dog or cat to a household takes far more than the fees associated with adopting or purchasing the animal, both of which range drastically depending on the breed, the source, and the location. The ASPCA reports that within the first few months of owning a dog, pet owners can expect to pay approximately $565 for items like veterinary care, a crate and bed, training, and spaying or neutering. For a cat, owners should plan to pay around $365 for similar one-time, upfront expenses. Over the course of a year, dogs and cats cost money, including the following routine expenses:
- Food: $120 for a dog and $145 for a cat
- Annual veterinary exams/shots: $235 for a dog and $130 for a cat
- Toys and treats: $55 for a dog and $25 for a cat
- Licensing: $15 for a dog and $0 for a cat
- Miscellaneous: $45 for a dog and $30 for a cat
In addition to these costs, dogs and cats may also require routine grooming, emergency medical attention, or daycare and boarding throughout the year, adding up to an average of $1,270 for a dog and $1,070 for a cat in the first year alone. Subsequent years may be closer to $700 for either a dog or cat.
Pet Insurance Costs
Pet insurance was designed to help pet owners offset some of the costs listed above. Just like with an individual insurance policy, policyholders pay premiums to an insurance company in exchange for coverage in the event a costly emergency takes place. Pet insurance premiums vary based on the amount of coverage put in place, the type of pet insurance selected, the size and breed of the pet covered, and the state in which the pet lives.
There are several pet insurance companies available to pet owners, with the cost of pet insurance with each specific company starting as low as $19 per month for a dog and $10 per month for a cat. The monthly cost of pet insurance could be much higher based on previous medical issues a cat or dog has experienced, the age of the pet, and the amount selected for the deductible.
Pet Insurance Coverage
Insurance coverage for dogs or cats can cover a wide range of emergencies, health conditions, and even routine visits to the vet that might be difficult to cover out of the pet owner’s savings. Some pet insurance policies will reimburse a pet owner for veterinary costs that accrue after getting their pet care for a hereditary disorder, a broken bone, or a terminal illness like cancer. Others only cover expenses for specific events, like an emergency visit or a wellness exam.
With any pet insurance policy, the pet owner is only offered reimbursement up to certain limits, agreed upon at the time the policy is put in place. This could be as high as 100% of veterinary costs, less any deductible owed by the pet owner. The greater the coverage offered by the pet insurance company, the higher the cost of the premium to put that policy in place.
Types of Pet Insurance
There are three main types of pet insurance through a variety of insurance companies, including major medical, wellness, and accidental or emergency policies. In some cases, more than one type of pet insurance coverage can be purchased through the same insurance company, providing more comprehensive protection for the pet owner. Here is how major medical, wellness, and accidental or emergency pet insurance policies compare:
- Major Medical Issues: pet insurance policies defined as a major medical plan are the most common type of pet insurance sold in the U.S. These plans cover the veterinary costs for unexpected health problems a pet may face, like a broken bone, a terminal illness, or a debilitating hereditary condition. Major medical pet insurance policies do not typically cover pre-existing conditions, nor do they pay for routine check-ups or wellness exams.
- Wellness Appointments: insurance policies that fall into the wellness category cover routine care of a pet, including vaccinations, shots, boosters, and annual exams.
- Accident Coverage: accident policies for pets only cover conditions or injuries that are the direct symptom of an accident, like broken bones, lacerations, or ingesting a foreign object or substance. Accident coverage does not offer coverage for medications, wellness exams, pre-existing conditions, or illness not related to an accident.
Pet insurance companies, such as Embrace and USAA, often recommend that pet owners of younger dogs or cats get the most comprehensive coverage they can feasibly afford, including the wellness policy and major medical coverage. In the first few years of a pet’s life, veterinary expenses for routine exams, shots, and vaccines are costlier than they are in later years, and pet owners have more of a tendency to make emergency trips to the vet, even if the pet ends up being healthy. Having a comprehensive policy that includes more than one type of pet insurance coverage makes paying the monthly premium worthwhile to some pet owners.