Is Pet Insurance Worth It?

Understanding how pet insurance works can help you decide whether it's worth it for your pet and your budget.

What is pet insurance and how does it work?

Pet insurance helps with the cost of unexpected injuries and illnesses for dogs, cats and other pets. Unlike human health insurance, it usually works on a reimbursement model.

On the plus side, there are no networks to consider or limitations on where you can take your pet. Any licensed veterinarian can treat your furry family member. With most pet insurance companies, you pay the vet bill up front, submit a claim and then receive reimbursement for eligible costs after your deductible and according to your reimbursement rate.

Need more info? To learn more about Amica’s offerings, explore our pet insurance coverage.

What does pet insurance cover?

Coverage varies by plan and provider, but many policies are designed to help with unexpected medical care rather than routine expenses.

Amica notes that available pet insurance coverage may include emergency and specialist care, surgery, diagnostic testing, illness treatment, some dental illness, breed-specific and genetic conditions, cancer, chronic conditions and complementary therapies.

Types of pet insurance plans

• Accident and illness plans: These are the most common plans. They may help cover emergency treatment, diagnostic testing and care for conditions such as broken bones, cancer, ear infections and allergic reactions.
• Accident-only plans: These lower-cost plans generally focus on accidental injuries, such as swallowing a foreign object or getting hurt in a collision.
• Wellness plans: Often offered as an add-on, wellness coverage may help with routine or preventive care, such as vaccines, spaying or neutering, microchipping and heartworm prevention.

A quick snapshot:

How to choose pet insurance coverage

When you purchase a policy, you'll have to choose the following:

• Plan limit: While some companies limit the amount they’ll pay for a particular condition, an annual limit is more common. Limits vary by insurer, but you can usually choose a limit between $2,500 and unlimited. The higher the limit, the more expensive your premiums.
• Deductible: The deductible is the amount you must pay – usually annually – before your insurance helps with the cost. Deductibles typically range between $250 and $1,000. A higher deductible will give you a lower premium, but it also means you’ll pay more out of pocket if your pet needs care.
• Reimbursement percentage: Insurers will reimburse you for a portion of your pet's care after the deductible has been met. Reimbursement rates typically range between 60% and 90%, with 80% being most common.

Quick takeaway: Pet insurance may be most valuable when an unexpected illness or accident would be hard for you to pay for on your own. It can help with big surprises, but it typically will not reimburse every dollar of care.

For example, let’s say your dog develops bloat, a potentially deadly condition, and requires emergency surgery – and it’s the first medical expense for your pet in the past 12 months. It costs $3,000 for the surgery, but you have a pet insurance policy with a $500 deductible and 80% reimbursement percentage.

Your pet insurer would reimburse you $2,000 (80% of the $2,500 remaining after you pay the first $500, which is your deductible). So you’d be out of pocket for $1,000 – the $500 deductible, plus your 20% ($500) share of the cost after the deductible is paid.

Pros and cons of pet insurance

Carefully weigh the pros and cons of pet insurance:

Pros

• Less stress during an emergency: When your pet is ill or hurt, the last thing you need is undue stress over money. Pet insurance offers a safeguard so you can focus more on your pet, and less on your bank account.
• Financial relief: Emergency veterinary care, from surgery to cancer treatment, can cost thousands of dollars. By reimbursing you for a portion of the bills, pet insurance provides financial relief and reduces the odds you may have to forgo treating your companion because you can’t afford the full cost.
• More treatment options: With pet insurance, you can more easily take advantage of newer, pricier treatment options, without having to worry so much about their cost.

Cons

• The premiums add up: The North American Pet Health Insurance Association reported that the average monthly premium was about $62 for dogs and $32 for cats. For older pets, the cost can be much higher, as it can be from the start for certain breeds prone to expensive problems such as hip dysplasia. Over a pet’s lifetime, you could potentially spend $5,000 or more on insurance premiums. These costs may still be worthwhile for owners who want protection from unexpected, high vet bills.
• Preexisting issues aren't covered: Pet insurance won't cover conditions your pet had prior to enrollment or that developed during the policy's waiting period. For example, if your pet develops arthritis before acquiring pet insurance, any treatments for the condition down the line likely won't be covered.
• Exclusions apply: Coverage exclusions can vary by provider, but many policies don’t cover vet exam fees, dental disease treatment, certain age-related conditions (for example, hip dysplasia in pets enrolled after age 6) or alternative and experimental therapies. These details vary by plan, so reviewing what’s included is important.

Is pet insurance worth it for your situation?

The value of pet insurance depends on your pet’s health needs, your budget and how comfortable you are covering large vet bills yourself. You are most likely to see clear financial value from a policy if your dog or cat needs extensive care, such as cancer treatment, surgery or ongoing treatment after a serious accident.

Keep in mind, too, that insurance won’t reimburse the full cost of such care. The vet bills for serious medical events often run up to five figures, and you’ll need to be able to cover 20%, or whatever other percentage your policy requires, of the treatment cost. That shared portion can still be substantial for major procedures.

For some pet owners, that predictability alone can make pet insurance feel worthwhile. A monthly premium may be easier to plan for than a large surprise expense.

A few scenarios to consider:

When buying early may matter

A pet policy is best purchased when your pet is young and healthy, even if it’s less likely you’ll need to use the coverage for a while. The younger the animal, the less likely they are to have already developed health problems, so future claims may be more likely to be approved.

Recently adopted a pet? You may also want to explore the costs that you can expect to help you think through first-year expenses beyond insurance.

Alternatives to pet insurance

If pet insurance isn’t for you, there are other ways you can relieve the potential burden of veterinary costs. Consider these alternatives:

• Build a pet-specific savings account: Instead of a pet insurance policy, consider opening a separate savings account and each month place into it the money you might have spent on premiums. You may find that suffices to cover your vet bills, and even leaves you with some money in hand. Some owners also use this in combination with pet insurance to help cover costs not included in their policy.
• Have ready credit available: While you shouldn't take on unnecessary debt, having a credit card available can come in handy when you have a pet emergency.
• Ask about payment plans: Some veterinary offices offer payment plans, so you can pay off the vet bill in installments.

Comparing pet insurance with other ways to prepare for vet bills? Think about whether you want help with worst-case costs, routine budgeting or both.