Is Pet Insurance Worth It? Pros & Cons Explained

Dog owners are estimated to spend $235 - $776 on veterinary care each year, while cat owners shell out $160 - $564.  That equates to as much as $10,088 over the course of the average dog’s life or $8,460 for a cat!

It’s easy to imagine how we could spend so much on our furry friends, considering that a routine vet visit will usually run you about $75, while surgery, hospitalization and treatment for major ailments like cancer or a torn ligament can each cost well over $1,000.  And, in the face of these steep costs, it’s obvious why animal lovers would consider taking out pet insurance – especially in light of how much debt the average household already has!

However, the vast majority of pet owners opt against this type of financial protection.  Only 3% of dogs and 1% of cats are insured, according to the pet insurance company Embrace, and other estimates peg coverage rates at as low as 0.65% of the canine and feline population.  Public opinion polling has also revealed that people are hesitant to spend more than $500 at any one time on veterinary care.

That should lead you to wonder:  Is protection against unexpected veterinary costs – and the freedom to do right by your pet without worrying about your wallet – worth the cost of another monthly premium?  That’s ultimately a very personal question, depending on the type of pet you have, the level of care you wish to provide and the current state of your finances, but for most people the answer is no.  Unless your pet needs surgery or contracts a major illness like cancer, the cost of pet insurance typically outweighs the coverage you would receive.

To find out how we came to that conclusion and to learn more about pet insurance, continue reading below.

Comparing Popular Pet Insurance Policies

WalletHub compared the cost of policies from nine of the most popular pet insurance providers using a three-year-old male Labrador retriever (his name is Wally!) as our test case.  We chose Wally because more households have a dog than a cat and Labradors have been the most popular breed of dog for the last 24 years, according to the American Kennel Club.

We assumed that Wally’s annual veterinary costs would amount to roughly $500 per year, as this represents the midpoint of previously published estimates for canine medical care and also incorporates both regular and emergent care.  Using this price point as a guideline, we then constructed a hypothetical medical history for Wally based on the most common pet insurance claims and the likelihood that he would develop certain breed-specific conditions.

This enabled us to determine how much of a pet owner’s monthly burden each insurer would cover and thus how much bang a policyholder would get for his or her buck.  We considered each insurer’s basic-level policy, as it provides the most palatable average premium for consumers and is most representative of each policy’s fundamental exclusions.  As you can see from the chart below, only ASPCA’s policy would provide net savings in a standard-care situation, while the pool expands when more serious illnesses are introduced.

Is Pet Insurance Right For You?

There’s no real rule of thumb that indicates when you should and should not purchase pet insurance, other than the fact that you must be able to afford it without incurring any additional debt.

Whether or not this insurance – which costs an average of $30 per month for dogs and $20 for cats – proves to be a good value will ultimately depend on your pet’s medical needs. It will clearly be a successful purchase if your veterinary savings outweigh the cost of monthly premiums, but it’s impossible to quantify the value of helping your pet live a longer, healthier life with the aid of preventive care and reduced financial constraint. Furthermore, there is enough transparency regarding what ailments different insurers do and do not cover that consumers should be able to approach their purchase with open eyes.

Given how inherently personal the value proposition posed by pet insurance seems to be, the best thing we can do is help you make sure that you can simply afford the monthly expense as well as thoroughly analyze the available coverage options. Below, you can find a list of questions that anyone contemplating pet insurance should ask themselves. The following section contains a breakdown of popular plans.

How Much Disposable Income Do I Have?  After paying taxes, all of your monthly bills, existing debts and yourself (via emergency fund contribution), how much money is left over? If you have at least $30 to spare, insuring your animal pal may be a relative no-brainer.

If you’re like most people, however, and you don’t have much left over, you’ll need to think about which current monthly expenses you could replace with pet insurance payments.

Which Do I Value More:  Pet Insurance or [Insert $30 Monthly Expense Here]?  Everyone has both luxuries and necessities among their monthly expenses. Unfortunately, most people will consider pet insurance to be the former. That means you’ll need to create some room among your discretionary spending.  This could entail eliminating a major expense – cancelling your cable subscription, for example – or doing away with a collection of minor expenses, such as eating out and taking Uber instead of walking.

Think about what inessential expenses you currently have that total at least $20 - $30 and consider whether you want that or the peace of mind that comes with pet insurance more.

How Many Pets Are In My House?  The more pets you have, the better value pet insurance will be. Pet insurance providers typically offer multi-pet discounts, so make sure to inquire after any such deals.

Tips For Saving On Pet Insurance

We help you save on health, auto, homeowner and pretty much every other type of insurance, so why not provide some tips for saving on animal insurance?  In many respects, these money-saving strategies mirror the habits that smart shoppers use when buying anything.  So, check out our pointers below and see how low your pet bills can go! 

• Buy When Your Pet Is Young: Much like with human health insurance, delaying your purchase may lead to eligibility requirements and higher costs.  Some pet insurers will not cover older dogs or preexisting conditions. 

• Know Exactly What You Need: Buying more coverage than you need is a classic insurance mistake. Buying budget and discovering more holes in your policy than Swiss cheese is another one.So, do your research to determine what coverage you need based on the type of pet you have as well as its breed history, medical history.  If you have a veterinarian that you trust, they’ll likely be able to provide some recommendations. Once you know what you need, you can compare policies that offer the requisite coverage in order to find the lowest possible choice. 

• Shop Around: Price comparison is the key to saving money and avoiding surprises with any purchase. You can use our price comparison table above as a guide, but prices change and are often geographically-based, so it’s worth making inquiries online and over the phone to find the best deal. 

• Look For Discounts & Incentives: Does your homeowner’s insurance provider offer a discount to customers who cover their pets? Are any pet insurers offering sign-up bonuses? There are the types of considerations that can tilt the standard value hierarchy among pet insurance companies. 

• Save Documentation: It’s important that you print a copy of your pet insurance policy, as well as any official correspondence between you and the provider, both so you can review them in depth and so you’ll have proof of the terms of your deal should a future dispute ever arise.  By that same token, it may be worth taking a screenshot of the provider’s website if it lists any temporary specials that you avail yourself of. 

• Take Advantage Of Coverage:  Much like you want to get your money’s worth of a car manufacturer’s maintenance guarantee to get your oil changed and a general tune-up on a regular basis, you should make sure to actually use your insurance coverage – especially if it covers regular vet visits.  Preventive care is a powerful thing, after all, particularly if it’s free or relatively inexpensive.

Detailed Pet Insurance Coverage Comparison