The pros and cons of pet insurance

The pros and cons of pet insurance

Anyone who has owned a pet can attest to just how costly it can be. The average annual cost of owning a cat is $1,149, while the cost of owning a dog comes to about $1,391 per year, according to the ASPCA.

And that doesn’t even include the one-time costs when you first get the pet, nor does it include extras such as professional grooming or dental work.

While some of these costs are unavoidable, others can be reduced — or avoided altogether — with pet insurance. Keep reading to learn more about how pet insurance works, some of the pros and cons of having it, and whether it’s worth the cost. 

What is pet insurance?

Pet insurance is a type of insurance that covers your pet’s health. Think of it like the health insurance you have for yourself and your family, but for your pet instead.

Like other types of insurance, pet insurance requires that you pay a monthly or annual premium. And in return, your pet insurance company agrees to cover any eligible veterinary expenses.

Pet insurance has many of the same characteristics as other types of insurance. In addition to the monthly premium, you also will likely pay a deductible before your expenses are covered and may have a limit on the amount your insurance company will cover.

Unlike health insurance, pet insurance doesn’t usually pay the veterinarian directly. Instead, you’ll pay the bill and submit it to your pet insurance provider for reimbursement. One of the benefits of this system is there’s no such thing as a “network,” and you aren’t limited as to which veterinarians you can bring your pet to.

What does pet insurance cover?

Pet insurance doesn’t necessarily cover all expenses related to your pet’s health. Instead, there are a few different types of pet insurance, each designed to cover certain expenses. There are three primary types of pet insurance. 

Accident-only pet insurance

As the name suggests, this type of pet insurance only covers accidents your pet has. For example, if your dog hurts their leg while playing fetch, this type of policy would cover it. This type of policy should also cover testing, procedures, and medications related to covered accidents. 

Accident and illness pet insurance

Just like the type of policy listed above, accident and illness pet insurance will cover treatment for an accident your pet has.

It should also cover both common and serious illnesses, including hereditary conditions. Coverage should include testing, procedures, and medications related to covered accidents or illnesses.

Routine wellness pet insurance

The final type of pet insurance is designed to cover routine preventative and wellness care for your pet. It will typically cover routine checkups, vaccines, flea and heartworm prevention, and other similar care. However, it won’t cover illnesses or accidents.

Rather than being a standalone plan, routine wellness pet insurance is often an optional add-on to your existing coverage. Adding this type of coverage to an accident and illness policy could cover most of your pet’s veterinary expenses.

What pet insurance doesn’t cover

It’s equally important to understand what your pet insurance doesn’t cover since these are expenses you’ll have to pay out of pocket. Here are a few key expenses pet insurance won’t usually cover:

  • Pre-existing conditions
  • Food and vitamins
  • Breeding and pregnancy
  • Behavioral treatments
  • Boarding and kennel fees
  • Taxes and administrative fees charged by your veterinarian
  • Grooming
  • Lost or stolen pets
  • Cosmetic or elective procedures
  • Experimental treatment
  • DNA testing
  • Non-veterinary expenses 

How much does pet insurance cost? 

According to the National American Pet Health Insurance Association, the average cost of pet health insurance ranges from $10.85 per month or $130.24 per year to $48.66 per month or $583.91 per year. The table below shows the different rates depending on the type of insurance and the type of pet.


Accident only 

Accident & illness 


Monthly: $10.85 

Annual: $130.24 

Monthly: $28.57 

Annual: $342.57 


Monthly: $19.93 

Annual: $239.11 

Monthly: $48.66 

Annual: $583.91 

Of course, these numbers only represent the average cost for those two types of coverage. Many factors impact the premiums you’ll pay including:

  • Your coverage type and amount
  • Your deductible
  • Your location
  • Your pet’s age and breed 

Generally speaking, small-breed dogs tend to have cheaper pet insurance than large-breed dogs. You can also expect to pay more if your dog is older or is a breed that is more prone to health issues. Additionally, adding routine wellness care to your policy will increase your premium.

Pros and cons of pet insurance 


  • Pet insurance can significantly reduce out-of-pocket veterinary expenses.
  • There are several types of pet insurance, so you can choose the policy that works best for you.
  • Pet insurance can eliminate the need to choose between your financial well-being and your pet’s health.
  • Pet insurance is relatively affordable for most pets.
  • Pet insurance doesn’t have healthcare “networks,” meaning you can see any veterinarian you like.
  • Most pet insurance policies come with low deductibles, limiting out-of-pocket costs. 


  • Pet insurance reimburses you for veterinary expenses, meaning you have to pay them upfront.
  • Pet insurance doesn’t cover pre-existing conditions, meaning once your pet is sick, it’s too late to sign up.
  • Not all health issues are covered by pet insurance.
  • Pet insurance can be cost-prohibitive for older dogs or breeds prone to injury and disease.
  • Many pet insurance policies don’t cover animals other than dogs and cats.
  • Routine wellness isn’t covered without an optional add-on. 

Is pet insurance worth it? 

Whether pet insurance is worth it can be a bit subjective. One pet owner might buy pet insurance and never need to use it. On the other hand, another pet owner might not buy health insurance and then have a pet that suffers many illnesses and injuries. Those two individuals may have very different feelings on whether pet insurance is a worthwhile expense.

According to the American Pet Products Association (APPA), the average dog owner spends about $458 per year on surgical veterinary visits. Meanwhile, pet owners pay about $242 per year for routine veterinary care. In the case of cats, the average pet owner pays $201 for surgical veterinary visits and $178 for routine veterinary care.

So how does that compare to the cost of pet insurance? For both dogs and cats, the average annual cost of veterinary care exceeds the average annual cost of pet insurance, suggesting that pet insurance is worth it if you have comprehensive coverage.

Of course, there will probably be years when you spend more on pet insurance than you save on veterinary care. In those years, you may have overspent a couple of hundred dollars. 

The risk of not having pet insurance, on the other hand, is considerably larger. Sure, some pet emergencies may only cost a few hundred dollars. However, some cost thousands — or even tens of thousands — of dollars. And when that happens, some pet owners find themselves in the heartbreaking situation of choosing between their own financial well-being and their pet’s health. 

Given all of this, pet insurance may be worth it for many pet owners. Situations where it may not be worth it for you include if your pet is older or already has health problems or if you could easily afford an expensive veterinary bill. 

How to buy pet insurance

Are you considering buying pet insurance? Here’s how to get started:

  1. Start early. The best time to buy pet insurance is when your pet is very young. Not only are premiums cheaper when you do so, but you’ll get coverage before your pet can get any pre-existing conditions that may not be covered later. 

  1. Decide the type of pet insurance you want. Remember, some policies cover both accidents and illnesses, while others only cover accidents. Additionally, routine wellness care is often available as an optional add-on to your policy. 

  1. Shop around for the best policy. Just like shopping for any other type of insurance policy, you probably don’t want to just sign up for a policy with the first insurer you find. Instead, shop around for the best rate and policy terms. 

  1. Sign up for your policy. Once you’ve chosen the pet insurance company you want to work with, complete the necessary forms to sign up. The company may request a veterinary exam or your pet’s medical history to ensure there are no pre-existing conditions. Once the policy is active, all eligible veterinary expenses should be covered after your deductible. 


Erin Gobler


Erin Gobler is a money coach who helps people pay off debt and reach their big financial goals without giving up spending on the things they love. She is a freelance writer for Empower.

Author is not a client of Empower Advisory Group, LLC, and is compensated as a freelance writer.

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