The Rise in Pet Ownership Costs
According to a study by Synchrony published in early 2022, owning a dog could cost up to $55,000 over the animal’s lifetime. Pet ownership is generally not cheap, but increasing veterinary care costs and overall pet spending can contribute to expenses.
According to data from the American Veterinary Medical Association, the mean annual expenditures on veterinary care for dogs and cats between 2020 and 2022 increased significantly. Dog-related spending increased from $224 to $362, while cat-related spending increased from $189 to $321. That’s more than a 60% increase, which means costs are rising faster than inflation.
How Much Does Veterinary Care Cost?
According to a survey from the American Pet Products Association (APPA), pet owners spent roughly $34.3 billion on veterinary care in 2021. Determining much you could potentially spend on medical bills without insurance is an important step in deciding if pet insurance is worth it.
What Are Average Veterinary Treatment Costs?
In 2019, Healthy Paws analyzed its claims data to determine the most common conditions pet owners submitted claims for and how much these conditions would cost to treat without pet insurance.
The most common conditions among both cats and dogs were gastrointestinal issues (caused by food allergies, inflammation or toxin ingestion). Medical treatment for these conditions without accident-and-illness coverage can cost thousands of dollars. When you compare that number to the cost of a pet insurance policy (anywhere from $120 to $1,200 annually), pet insurance can save you a lot of money.
What Are Average Routine Care Costs for Your Pet?
When your pet is young, they will need to go to the vet more frequently to receive their first round of vaccinations, spay/neuter surgery, parasite prevention and microchipping. After that, your pet will likely only need to see the vet once or twice per year for checkups and vaccine boosters. Still, these routine care visits can add up throughout your pet’s life.
We compiled data from multiple pet care sources (including the American Kennel Club, ASPCA and Pet Care Rx) and determined the following cost ranges for the most common routine care vet visits.
- Annual exam: $45–$55
- Blood test (for allergies): $200–$300
- Dental cleaning: $70–$400
- Fecal exam: $45–$55
- Microchipping: $25–$65
- Spay/neuter surgery: $55–$300
- Vaccinations: $95–$120 (for the first round of vaccines); $18-$25 (for boosters)
- X-ray: $103 to $383
More Pet Owners Have Insurance Now Than Ever
The Insurance Information Institute (Triple-I) reports that pet insurance policy numbers increased by 22% between 2021 and 2022. The likely reason for this increase is the rise in veterinary visit costs, economic changes and an evolving insurance marketplace with more provider options than ever before.
Pet insurance allows pet parents to make decisions based on their pet’s medical needs, which can prove difficult when facing expensive veterinary bills that exceed your budget. Insurance can also help prevent economic euthanasia, or the decision to put a pet down if you cannot afford a life-saving treatment.
Pet insurance policies can also help reduce stress on veterinary teams by simplifying conversations by shifting the focus from finances to a pet’s overall health.
The Cost of Pet Insurance
According to sample quotes we obtained during our cost analysis, the average cost of pet insurance is $66 per month for dogs and $32 for cats. This is in line with current data on file with the North American Pet Health Insurance Association (NAPHIA), whose research suggests averages around $53 for dogs and $32 for cats.
Keep in mind that averages do not illustrate the full range of potential insurance costs, which can vary depending on your pet’s age, species, breed and location. For example, it is more expensive to insure purebred animals, and since your cost of living plays a major role, you may pay more if you live in a city.
Here are the average monthly costs for policies in states where major pet insurance providers operate:
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State | Average Monthly Plan Cost |
California | $63 |
New York | $59 |
Florida | $46 |
Pet Insurance Cost Over Time
Pet insurance premiums increase over time as a pet gets older, increasing its likelihood of developing diseases and the cost of associated care. The increase happens slowly at first, then jumps more each year until your pet becomes a senior. Some companies may also consider claims history to determine future premiums — the more claims you have filed in the past, the higher your rate.
What Will a Pet Insurance Plan Reimburse?
Pet insurance coverages differ depending on the plan type, but the two main options include accident-only and accident and illness policies. Accident-only plans cover costs relating to accidental injuries, such as trauma from a vehicle collision or ingesting a toxin. Accident and illness plans are more comprehensive, extending coverage to acute, chronic and hereditary illnesses.
As long as the condition is not pre-existing and does not occur during a policy’s waiting period, pet insurance covers most diagnostics and treatments. Exceptions include cruciate ligament tears, hip dysplasia, hereditary conditions and bilateral conditions, which often have special limitations. Providers typically cover prescription medications, surgeries, procedures, rehabilitation and alternative therapies in the base plan or through optional coverage riders.
Some conditions and services that companies often exclude include pre-existing conditions, pregnancy and whelping complications, cosmetic procedures, experimental procedures, preventive care, elective procedures and conditions arising from neglect or failure to follow reasonable veterinarian recommendations. Pet insurance also typically does not cover non-veterinary expenses, such as grooming and training.
Coverage Limits, Deductibles and Reimbursements
Pet insurance plans do not provide complete coverage — in other words, you will still have to pay part of your veterinary bill. Pet insurance includes many of the same features as other types of insurance, including deductibles, coverage limits and reimbursement rates. Adjusting these parameters helps determine your monthly premium costs and the amount you will have to pay when filing a claim.
- Deductible: The amount you pay toward covered services each year your policy renews. Once you meet the deductible amount, commonly between $100 and $1,000, the plan begins reimbursements.
- Coverage limit: Most plans cap how much a provider will reimburse you annually, per incident or throughout your pet’s lifetime.
- Reimbursement rate: The percentage of covered claims your plan will pay back to you, usually between 70% and 90%. You are responsible for covering the rest of the bill.
To illustrate these concepts, here is an example. Your pet experiences an emergency and the bill is $2,500. Unless you have one of the few providers that contract directly with veterinarians to provide instant payment, you will pay the bill out-of-pocket at the time of service. Then you can file a claim and your insurance company will determine how much to reimburse.
Let’s assume you have a $500 deductible, an 80% reimbursement rate and a $10,000 annual limit. It’s your first claim of the current policy year, so you will have to first meet your deductible. Your company would first subtract the deductible, and then apply your reimbursement percentage. In this case, you would see a reimbursement of $1,600. Since this amount is less than your average coverage limit, you would receive the full reimbursement but have up to $8,400 left for your contract term.
Keep in mind that some plans calculate reimbursements differently and may exclude portions of a bill, which can lower your total reimbursement. Ensure you read your plan’s fine print to understand how a company calculates reimbursements.
Do Veterinarians Think Pet Insurance Is Worth It?
We consulted our panel of licensed veterinarians to get their expert opinion on pet insurance and whether they would recommend it to their clients. Here’s what they had to say:
- “As a veterinarian who works mostly in emergency medicine, pet insurance has proved invaluable to some of my clients who have had pets involved in accidents completely outside of their control… Emergency services are more pricey than your regular vet, so having pet insurance gives owners the peace of mind they can afford to pursue the best treatment for their pet at a very stressful time.” —Dr. Corrine Wigfall, veterinarian and consultant at SpiritDog Training
- “It is definitely worth it! … Our pets depend on us to provide everything for them, and there is no better way of caring for our beloved family members than having the peace of mind that their medical needs will be covered.” —Dr. Paolo Cuevas, veterinarian and behaviorist
- “Many pet owners think pet insurance is an unnecessary expense... I have had pet insurance on all my dogs and I am a veterinarian. My German shepherd tore his CCL several years ago and his surgery was $4,000. My insurance company reimbursed me $3,600. They also paid for part of his physical therapy following surgery. Over the years, pet insurance has paid me more than I have paid them.” —Dr. Shannon Barrett, veterinarian and owner of Downward Paws
Alternatives to Pet Insurance
For those who are unsure about purchasing pet insurance, there are a few alternative ways to budget and save for pet care. The below alternative methods allow you to spread out the cost of veterinary care and offer a backup in case of a large, unexpected bill. You can also decide how and when to spend alternative funds or use credit, which is the opposite of insurance companies that dictate your reimbursement amount. However, each method may fail to cover large or ongoing bills and not always result in net savings over time.
Pet Emergency Fund
A commonly used pet insurance alternative is starting a pet emergency fund. Rather than paying into pet insurance each month, pet owners can set aside money for pet care into a savings account for future use.
Pet Credit Card
You can use a pet credit card to cover veterinary expenses upfront and pay back the balance later. A dedicated pet credit card is most useful if you can choose a card with deferred interest. CareCredit is the most popular and well-known pet credit card and is accepted in many veterinary and human healthcare facilities. If you meet the minimum for promotional payment plans, CareCredit defers interest for six to 12 months.
Payment Plans
Individual veterinary hospitals may allow payment plans to divide the cost of a large veterinary bill. In most cases, plans are administered through third-party lenders and resemble a traditional loan. Repayment terms depend on your credit score and the hospital’s preferred plans.
Frequently Asked Questions About Pet Insurance
The amount you should spend on pet insurance for a dog depends on a variety of factors, including your location and your pet’s age, breed and specific health concerns. We found that the average cost to insure a dog is around $66 per month.
It’s best to get insurance for your pet as early as possible. No pet insurance provider covers preexisting conditions, so investing in pet insurance early will ensure costs are covered if and when your pet get sick or injured.
How much pet insurance pays depends on your provider and policy. In most cases, you’ll need to meet a deductible each year (usually between $100 and $1,000) before you’ll begin to receive reimbursement. The amount you’re reimbursed also depends on the reimbursement rate you selected during enrollment. Most companies will reimburse between 50% and 100% of each bill. Additionally, you’ll only be reimbursed for services that are covered under your policy. This may include accidents, illnesses and/or routine preventive care depending on your selected plan.
The main disadvantage of pet insurance is the monthly cost to maintain a policy. You pay a premium each month, but may not receive payouts consistently unless you file claims. Pet insurance also will not cover pre-existing conditions, which can take away from a policy’s overall value if your pet was diagnosed with a condition before policy enrollment.