You’re sitting in an examination room at the emergency vet. Your puppy took too big of a leap of faith and injured her leg jumping off the couch, but you’re not sure how badly. The vet comes back into the room with the X-ray results. “Looks like a small fracture. It’s easily treatable – you got lucky!” You let out a sigh of relief and think, “I bet that’s covered under my pet insurance plan. Let me check my policy. Thank goodness broken bones are covered!” You are so happy you opted to purchase one of the best pet insurance plans that fit your budget and your pet’s needs before an emergency occurs.
According to the American Pet Products (APPA) National Pet Owners Survey of 2023 and 2024, 66% of US households (86.9 million) own a pet. Of those pets, 33% need emergency veterinary treatment every year. But is every pet owner ready for the financial costs of routine and emergency pet care? Find out why pet parents get pet insurance, what pet insurance policies do and do not cover, and trends and statistics of the pet insurance industry to learn more about pet insurance policies.
What is Pet Insurance, and Why Get It?
Every pet wellness plan includes regular visits to the veterinarian. Pet parents should establish a relationship with a licensed veterinarian. He or she can map out a wellness plan that includes preventative pet care and education for recognizing symptoms of common illnesses in pets.
Part of being a responsible pet owner is ensuring financial preparedness to raise healthy, happy pets. However, only 4% of dog owners and 1% of cat owners are covered by a pet insurance policy. The total number of insured pets has experienced an average growth rate of 26.6% since 2018 according to the North America Pet Health Insurance Association, demonstrating that pet owners are increasingly interested in pet insurance services.
Vet costs for pets are increasing each year while wages are not increasing at the same rate, prompting pet owners to turn to pet insurance policies. For example, the average annual vet costs for dogs increased 60% from 2020 to 2022, from $224 to $362, and increased 70% from 2020 to 2022, from $189 to $321 for cats according to Global Market Insights. Costs are increasing due to several factors, including advancements in medical procedures, a high inflation rate, technological innovations, and overhead costs such as supplies, medications, and leases. Pet insurance helps pet owners combat rising vet care costs since they are not projected to trend downward in the coming years.
According to the American Society for the Prevention of Cruelty to Animals, the total average annual cost to own a dog is around $1,400, and a cat is $1,150. Twenty-one percent of pet parents reported they had paid more than $1,000 for a single vet emergency visit and 31% reported a bill of $201-500. Vet visits and treatment often require payment upfront, but not everyone is prepared to pay in full on the spot. In fact, 37% of Americans have an average of $400 in savings according to Lending Tree. MarketWatch notes that 38% of 1000 survey respondents have previously gone into debt to pay for their pet’s medical expenses. That’s when a pet insurance policy comes in handy.
How does pet insurance work?
Pet insurance helps pet parents afford routine and unforeseen health care needs so they do not have to pay the full price depending on the plan’s coverage. Pet insurance is a formal contract between pet parents and a pet insurance company stating they will pay the full amount or a portion of the wellness and medical services a pet receives at a standard veterinarian practice or emergency veterinarian clinic. Pet parents pay a monthly premium for the policy and a percentage of the cost of the service rendered. Each policy covers, or partially covers, a specific set of conditions and illnesses, and the services vary according to the chosen plan. Some plans reimburse the policyholder, while others pay the vet’s office directly. In addition to dogs and cats, pet insurance policies can cover exotic birds, horses and livestock, reptiles, pigs, ferrets, rabbits, and rodents.
Types of pet insurance policies
Most pet insurance policies fall under a few categories. Understanding what each plan offers allows pet parents to decide which one fits their preferred services, budget, and more.
Basic accident-only plans: Ligament tears, bites, etc.
Basic accident-and-illness plans: Swallowed foreign objects, common puppy illnesses, poisoning, some cancers, etc.
Comprehensive plans: Diagnostic tests, emergency vet stays, surgeries, X-rays, and more.
Wellness plans: Vaccinations, routine visits, and other preventive care
What does pet insurance cover?
Regardless of which policy is chosen, pet parents should always read the fine print and thoroughly understand what pet insurance policies cover — and what it does not. Various pet insurance policies may cover:
Routine checkups and annual wellness exams
Dental care, including anesthesia if needed
Vaccinations
Flea, tick, and heartworm preventative
Prescription medications or diets
Spaying and neutering
X-rays and other diagnostic tests
Bloodwork and other laboratory work
Specialist visits
Congenital and hereditary issues like heart problems or hip dysplasia
Chronic conditions like skin problems or allergies
Digestive issues or respiratory problems
Some types of cancers
Injuries and accidents like swallowing a foreign object, broken bones, or infected cuts
Hospitalization and surgeries
What does pet insurance typically not cover?
While it’s a good idea to have pet insurance, many policies may not cover the following:
Breeding, pregnancy, or whelping
Pre-existing conditions
Regular grooming services
Boarding and doggy daycare
Cosmetic procedures like tail docking, ear cropping, etc.
Elective procedures
Supplements
Training
How much does pet insurance cost, and is it worth it?
Forbes notes that the average monthly cost of pet insurance is $44 for a dog and $30 for a cat for a policy that offers $5,000 annual coverage, a $250 deductible, and an 80% reimbursement level. For a plan with unlimited annual coverage, a $500 deductible, and a 90% reimbursement level, the average monthly cost of pet insurance is $56 for a dog and $47 for a cat. Typically, the higher the deductible, the lower the monthly cost is for pet insurance.
Typically, dogs cost more than cats to insure. A pet’s age, breed, and location contribute to how much a person pays for pet insurance. Older breeds tend to experience more health issues as they age, causing their premiums to rise. Certain breeds are more expensive to insure based on a predisposition for genetic health concerns associated with the breed. For example, Maine Coons, British Shorthairs, and Abyssinian cats are more expensive than insurance for mixed breeds and domestic shorthairs. French Bulldogs, Retrievers, and German Shepherds top the list of dogs with the most expensive pet insurance plans. Policy prices vary by state, with Arkansas being the cheapest and Connecticut reporting the highest monthly rates for pet insurance policies.
While only a small percentage of pet owners carry insurance on their pets, attitudes toward having a pet insurance policy are overwhelmingly positive with owners reporting pet insurance is worth the cost. Out of 1000 pet owners surveyed, 84% of respondents with pet insurance said the policy was worth it, and 78% of respondents planned to renew their pet insurance plan with their existing provider once the policy term ended. In addition, 74% gave their pet insurance provider either four or five stars for overall satisfaction. Veterinarians also overwhelmingly recommend pet insurance.
What is the range of costs for veterinary services?
While prices vary for services based on location, age, breed of the pet, and severity of the case, the Health Paws Cost of Pet Health Care Report notes the potential cost range of various veterinary procedures and treatments:
Stomach issues: $1,600-$29,086
Cancer: Top range of $21,644
Growth & tumors: $300-$13,692
Ear infection: $850-$12,954
Pain: Top range of $11,425
Eye condition: $1,100-$7,637
Skin condition: $200-$4,138
Every policy differs regarding the waiting periods, benefits, coverage, deductibles, premiums, and coinsurance. Pet parents have several options within each company to decide which policy best fits their needs. If pet parents have any questions, they can ask their pet insurance agent to explain the policy so they are prepared before they receive the next vet bill. A pet insurance policy cannot be purchased immediately after a vet bill. For example, a plan may cover cancer after the policy’s waiting period, but a pet cannot receive a cancer diagnosis and then be insured right away because it would be considered a pre-existing condition. Pet parents should have a policy in place before conditions and accidents occur.
What Do Pet Insurance Claims Look Like?
Pet insurance popularity grows each year with more owners opting into a plan. The number of insured pets in the U.S. jumped from 4.4 million in 2021 to 5.36 million in 2022 with numbers projected to grow in 2025 steadily. Most insured pet owners (92.8%) opted for comprehensive pet insurance plans that included a wellness plan and an accident-and-illness plan under one policy, suggesting that pet owners are more financially prepared for routine and emergency care over those who opt not to purchase pet insurance.
Trends in pet insurance claims
Regular visits and unfortunate circumstances prompt pet owners to file pet insurance claims, whether regarding a routine dental exam or injuries sustained from a car accident. Examining why pet owners file claims can help consumers know what to expect with common pet health issues. Understanding what could happen to their pets also informs people of their financial responsibility to see if a pet insurance policy is worth the cost for peace of mind.
Nearly half of pet owners with insurance make a claim every year. The top reasons for a pet insurance claim for dogs are skin conditions and urinary tract infections (UTIs) for cats according to the North America Pet Health Insurance Association State of the Industry Report 2022 and 2023 with gastrointestinal issues coming in second. Other top reasons for pet insurance claims are eye and ear infections, heart conditions, seizures, growths and tumors, liver disease, and cancer. If an owner has a breed that is more susceptible to skin conditions or gastrointestinal issues, he or she can determine if a policy is the right choice by checking out the most common reasons for filing a pet insurance claim.
Does Homeowner’s Insurance Cover Pet-Related Incidents and Costs?
Homeowners may be curious if their homeowner’s insurance states anything about pets being covered under the policy. While homeowner’s insurance typically does not cover circumstances under a pet insurance policy, some offer coverage for pet-related incidents. Homeowners should understand what their policy does and does not cover regarding their pets.
Liability insurance for pets can cover certain pet-related injuries occurring on a homeowner’s property or off the premises like at a dog park. For example, if their dog attacks a person or otherwise causes injury, liability coverage might cover legal fees and medical expenses.
However, not all breeds or animals may be covered under the homeowner’s policy, such as breeds thought to be more prone to aggression like American Pit Bull Terriers or exotic breeds like wolf hybrids or certain venomous snakes. These pets may be considered too high-risk to insure or require additional liability coverage.
In addition, some pet owners invest a lot of money into their pets. These items may be covered under a homeowner’s or renter’s personal property section. If a thief steals expensive clothing or accessories are damaged, policyholders may be covered.
One Paw Toward the Future
The future for pet insurance companies is bright as more pet owners turn to pet insurance to mitigate costs and protect their pets. While the pet insurance market was valued at $10.1 billion in 2023, a report from Allied Market Research revealed that it is projected to reach $38.3 billion by 2033, growing at a compound annual growth rate (CAGR) of 14.5% from 2024 to 2033.
As more technological advances occur in the world of pet medicine, costs will continue to rise along with cutting-edge procedures, surgeries, and health recommendations while also providing better care. Pet insurance policies will evolve to include high-tech offerings.
Pet insurance companies are becoming more flexible in the types of plans they offer rather than a few one-size-fits-all approaches. Customizable wellness plans, the introduction of holistic and alternative therapies, and picking coverage based on lifestyles will give future pet insurance policyholders more options.
As more pet owners wonder, “Should I get pet insurance for my pet?” they become aware of pet insurance policy options and the many benefits to their pet’s health – and the owner’s bank account. This new wave of awareness will have pet owners seeking out pet insurance policies to fit their wishes and opt for a plan that makes the most sense for their pets. The more consumers understand about pet insurance, the increase in preventative care for pets could result in healthier pets enjoying a longer, fulfilling life with their beloved companions.
Commentaires