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How to Buy Pet Insurance: The Main Steps to Take and Decisions to Make
By Joan Pabón MONEY RESEARCH COLLECTIVE
Pet ownership rates in the United States have soared since the start of the pandemic. And it’s no wonder, since studies have shown that animal companions can be great COVID companions. Interacting with pets can decrease cortisol levels, lower blood pressure, boost your mood and reduce feelings of loneliness — exactly what we need in times of stress.
Increasing pet ownership rates and, presumably, stronger animal-human bonds have also benefited the pet insurance industry, which experienced an astounding 30% increase in sales between 2020 and 2021. And states like California, New York and Florida are leading the trend, and now have the highest percentage of insured pets.
If you’re thinking about joining the thousands of pet parents that have insured their furry companions or just looking to learn more about pet insurance policies, this article is for you.
Table of content
- Should you buy pet insurance?
- How to get pet insurance?
- What is the average cost of pet insurance?
- Where to buy pet insurance?
- How to buy pet insurance FAQs
Should you buy pet insurance?
Whether pet insurance is right for you will depend on your pet and the type of pet owner you are. You see, premiums can vary considerably depending on the age and breed of your furry friend. And, as your pet grows older and its likelihood of illness increases, pet insurance costs also increase — sometimes considerably.
According to research by Money.com, pet insurance doesn’t pay off for owners of pets who enjoy a normal, healthy life. It’s only when your animal develops a serious medical condition or suffers a major accident that a policy can really save you money. If your pet develops cancer, for example, treatment can cost hundreds to thousands of dollars, and pet insurance can help soften the blow.
For a pet parent willing to do anything to save their pet, a policy can pay off. Just keep in mind that insurance policies don’t cover the full cost of treatment — most will cover between 70% and 90% of eligible vet bills. This means you’ll still have to pay between 10% and 30% of the bill plus exam fees. And, as most plans work on a reimbursement basis, you may still have to pay the bill upfront.
Another thing to consider is that pet insurance policies have annual limits. If you exceed your annual limit for a particular condition, you’ll have to cover the excess out of pocket.
Lastly, consider the cost of premiums over time and calculate how much you’d be able to save over the life of your pet if you banked the money you’d spend on premiums instead. Some may find that setting up a separate savings account for pet expenses could be just as effective as purchasing a pet insurance policy.
- Can help you save if your pet suffers a major accident or illness
- Provides you peace of mind knowing you'd be able to afford treatment
- Insuring your pet at a young age will help you save on premiums
- Coverage starts sooner than it would take you to set up an emergency fund
- The policy won't pay off if your pet has a normal medical life
- You'll still have to cover 10% to 30% of vet bills
- Most plans work on a reimbursement level, so you pay out of pocket
- Annual limits mean you may have to shoulder additional treatment costs
How to get pet insurance?
If you’re set on buying pet health insurance for your four-legged friend, look to purchase coverage sooner rather than later. Insuring a puppy or kitten is much more affordable than insuring an older pet. And not only do premiums increase as your pet ages (whether or not your pet is already insured), but coverage options may also become more limited. Some pet insurance companies set upper age limits for coverage, too.
When buying pet insurance, consider these:
1. Compare types of pet insurance plans
What pet insurance covers will depend on the type of policy you purchase. Plans generally fall into one of three categories:
- Accident-only coverage – Covers emergency care for major and minor mishaps like accidental injuries, bites, stings, broken bones, torn ligaments, poisoning, foreign object ingestion and emergency dental services (not routine dental cleanings). Accident-only plans will also cover hospitalization, surgery, lab tests, CT scans, X-rays and MRIs and medication prescribed as part of treatment.
- Accident and illness coverage – Covers accidents as well as illnesses. This includes minor illnesses such as urinary infections, major ones such as cancer, and congenital conditions like hip dysplasia and patellar luxation. Diagnostic testing, scans, sonograms, prescriptions for covered conditions and surgery are also covered.
- Wellness coverage – Covers preventive and routine care costs such as annual checkups, vaccines, spaying and neutering, dental cleanings, deworming treatments and even microchip insertion. This coverage doesn’t include elective surgery, training, conditions related to nursing/whelping or anal gland expression. Some insurers sell wellness coverage as an add-on that lets you augment accident-only or accident and illness coverage.
Determine the type of coverage you want
In general, accident and illness policies tend to be the most popular — and expensive — option, as they offer the broadest coverage. Accident-only policies tend to be more affordable, but coverage is then limited to mishaps.
Now, pet parents who spend a considerable amount of money on routine and preventative care costs may think wellness coverage is a good investment, and they could be right. Nevertheless, read the plan details thoroughly to understand policy limits. Some of the services included in the coverage can only be rendered once (spaying and microchipping, for example) and there may be a cap on the number of each type of service your pet can receive per year.
It’s also important to keep in mind that pet insurance policies generally exclude coverage for pre-existing conditions. This means that if your pet was ever treated for an illness before coverage began, subsequent recurrences of that illness likely won’t be covered by the plan. Some companies, however, do cover pre-existing conditions that have been in remission for some time — between six months and a year — or are considered curable.
Get multiple quotes
Since all insurance providers price risk differently, you might be quoted widely different amounts even if you select the same type of plan, deductible amount, reimbursement percentage and annual limit across providers.
For that reason, getting quotes from at least three insurance providers can help you save — and it doesn’t have to take a lot of time. You can typically get pet insurance quotes online in minutes. All you have to do is provide your location and contact information and your pet’s details.
Also remember that pet insurance companies will take into account your pet’s predisposition, by breed, to accidents, illnesses and behaviors when determining what you’ll pay for coverage. So, insuring a labrador retriever, a breed known for developing hip dysplasia, will cost more than insuring a mixed-breed dog.
Compare benefits and premiums
While some pet insurers offer the same coverage and benefits across the board, most vary in what they offer and require for enrollment.
For example, depending on the company, you may get one or several predetermined options for a deductible, reimbursement and annual limit. Similarly, some insurers have an upper age limit for coverage (typically 14 years) while others do not. Covered conditions and treatment options may vary by company as well.
Another thing that varies by company is how plans are structured. Most pet insurance works on a reimbursement model, where you pay for covered services and then submit a claim for reimbursement to the pet insurance company.
Some companies, however, will pay vets directly or provide that option in the event of emergencies. Keep in mind that payment could take a while to process and you may still have to submit documentation. If you’re interested in the vet direct pay option, ask your pet insurance company for more information.
One way of comparing plans, costs and benefits is to collect quote details in a spreadsheet to see your options side by side. Doing this will entail putting some time and effort into your search. It could, however, help indecisive pet parents and those who want to pay the lowest possible pet insurance rate.
If you have less time, you could simply read what each plan covers, paying special attention to the benefits you’re most interested in.
For example, if you want a policy that covers behavioral therapy, look for companies that advertise it, get quotes from each one and read plan details to understand exactly what you’re getting, and choose the best and most affordable option. Ultimately, how you choose to compare policies will depend on your priorities and budget.
Make a decision
If you have set a budget and determined some clear priorities from the start, deciding on a pet policy shouldn’t be difficult.
As part of your search, you may want to look at testimonials of others who have purchased the same plan, get recommendations from friends, family members or even a licensed veterinarian, and read online reviews across different websites. While online reviews may not paint a full picture, they could help you get a clearer idea of what you can expect from the pet insurer.
If you still need to do additional research before making a decision, our summary of the best pet insurance companies could be a good place to start.
What is the average cost of pet insurance?
According to the North American Pet Health Insurance Association (NAPHIA), average pet insurance premiums in the U.S. in 2021 were around $50 per month for accident and illness plans for dogs and $30 for cats. Accident-only policies were even more affordable. They cost an average of $20 per month for dogs and about $10 per month for cats.
That said, your actual premiums will depend on several factors, from your pet’s species, breed and age to your location. For example, insuring a four-year-old mixed-breed dog in Ohio could cost between $22 and $65 per month, depending on the company.
The following are some of the factors that affect pet insurance premiums:
- Type of pet – Cats have a lesser predisposition to hereditary conditions and a lower propensity for accidental injuries. That helps make cat insurance (for any cat breed) up to 30% cheaper than dog insurance.
- Pet breed – Again, some breeds of dogs are genetically predisposed to certain illnesses (breed-specific conditions). Insuring those breeds will cost more. Mixed-breed dogs are generally less expensive to insure.
- Age – Older pets will pay higher premiums as their likelihood of developing illnesses increases. Even if you weren’t sure about your pet at a young age, your premiums are about to increase over time.
- Location – Pet insurance is more expensive in states where the cost of veterinary care is higher. For example, average annual pet healthcare costs in California can be around $1,500. In North Dakota, by contrast, they can be under $800.
- Type of plan – Accident and illness policies are more comprehensive than accident-only or wellness plans, so they generally cost more.
- Deductible amount – The deductible is what you must pay before coverage for your pet can begin. The higher the deductible you choose, the lower your premiums will be. Deductible amounts generally range from $200 to $1,000.
- Reimbursement rate and annual limit – Pet insurance policies generally cover between 70% and 90% of eligible veterinary expenses — up to an annual maximum. Since the insurance company assumes a greater portion of the financial responsibility, choosing a plan with a higher reimbursement rate and annual limits will cost more.
Where to buy pet insurance?
| Company | Highlight | Annual coverage | Reimbursement options | Annual deductible options |
| Spot | Best for unlimited coverage | $2,500 – Unlimited | 70%, 80%, 90% | $100, $250, $500 |
| Lemonade | Best claims process | $5,000 – $10,000 | 70,%, 80%, 90% | $5,000 – $10,000 |
| Fetch | Another good option for high coverage limits | $5,000 – $15,000 | 70%, 80%, 90% | $300, $500, $700 |
How to buy pet insurance FAQs
What factors affect the cost of pet insurance?
Multiple variables are at play in determining the cost of pet insurance. They include the following:
- The plan's annual limit
- The deductible you choose
- Your location
- Your pet's species and breed
- Your pet's age
If you own several cats or dogs, many pet insurance providers offer multiple-pet discounts that could help you reduce your overall premium costs.
When is the best time to buy pet insurance?
If you've already determined pet insurance coverage is a worthwhile investment, then look to insure your pet as early on as you can. Premiums will increase with your pet's likelihood of developing illnesses and other serious conditions as it gets older. (However, starting early with pet insurance will not spare you those age-related hikes as your pet grows older.)
Is it better to save money for vet bills or buy pet insurance?
Whether it's a better financial decision to save money for vet bills or buy pet insurance will depend on your situation and preferences.
Many – perhaps most – pet owners may be best off financially if they set money aside every month for veterinary costs and potential emergencies. Doing that will mean you can use the funds for any type of expense.
Doing that, though, means you might or might not have sufficient funds when you need them. Buying a pet insurance policy can give you peace of mind knowing that coverage will begin after a reasonable waiting period and you'll be reimbursed for covered claims, up to a limit.
Research by Money.com suggests that, if your pet lives an average medical life, pet insurance may not be worth it. This type of policy really pays off when your pet suffers a major accident or illness and your veterinary costs are high.
How to get a free pet insurance quote online?
All the pet insurance companies we have researched offer free online quotes.
Simply visit their website and click on the button (which should be prominently displayed on the landing page) to get a quote. You will then be prompted to provide some personal details as well as information on your pet. Once you've done that, you'll be able to see your estimated premiums.
Does pet insurance cover pre-existing conditions?
Pet insurance generally excludes coverage for pre-existing conditions, meaning those your pet received treatment for before your policy's effective date.
That said, some pet insurers will cover conditions considered curable or that have been in remission for some time — typically six to 12 months. Other exclusions may apply, depending on the company.
Summary of our guide to how to buy pet insurance
Whether pet insurance is worth it for you will depend a lot on you. Specifically, it may hinge on how far you’re willing to go to protect your pet and your finances in the event your animal suffers a major accident or illness.
If the worst happens to your pet, or you fret about that possibility, a policy can provide reassurance and deliver actual savings. On the other hand, if your pet lives a normal life medically speaking, you’ll wind up spending a considerable amount of money on premiums (and related out-of-pocket costs) that might have been better invested elsewhere.
Nevertheless, pet insurance has continued to grow in popularity over the past couple of years. More and more owners are concluding that peace of mind about their pets is worth an extra monthly expense. And even when they have to pay out of pocket to get reimbursed, being able to recoup a portion of veterinary expenses can keep them from going over their monthly budgets or tapping into whatever emergency savings they have.
In short, whether or not to buy pet insurance is a personal financial decision that may or may not yield the expected results. But if you’re willing to go the extra mile for your best furry friend, there are plenty of great pet insurance companies out there for you to consider.
Joan is a professional translator, writer and editor with a special interest in personal finance and insurance topics. She has been a contributing author and independent researcher at ConsumersAdvocate.org since 2017 and an editor at Money since 2019. Her work has been featured in MSN Money and Apple News.