Pet insurance: Is it worth the cost?

Pet insurance represents an investment in the health and well-being of your cherished companion. While it may involve a substantial financial commitment, its value becomes evident when confronted with unforeseen circumstances such as serious illness or injury.

Imagine returning home to find your dog in distress, displaying symptoms of illness. Upon immediate veterinary evaluation, it is discovered that your pet has ingested a foreign object, necessitating urgent surgical intervention and incurring significant costs. In such scenarios, the financial strain of covering these expenses out-of-pocket can be daunting. This is where pet insurance proves indispensable.

Comprehensive pet insurance policies alleviate the financial burden associated with veterinary care. Coverage encompasses a range of medical necessities, including but not limited to cancer treatment, emergency interventions, prescription medications, and surgical procedures.

Beyond financial considerations, pet insurance can potentially save the lives of animals facing critical medical conditions. Without adequate resources for treatment, some pets may be subjected to euthanasia, underscoring the pivotal role of insurance in facilitating access to life-saving interventions.

However, the decision to invest in pet insurance warrants careful evaluation of individual circumstances. While it provides peace of mind during crises, pet owners whose pets rarely require extensive medical attention may question its cost-effectiveness. Assessing the likelihood of veterinary expenses against the premiums payable is essential in determining the suitability of pet insurance for your specific situation.

The rise of pet insurance

The popularity of pet insurance is steadily increasing, reflecting a growing inclination among pet owners to protect the health and welfare of their animal companions. Data from the North American Pet Health Insurance Association (NAPHIA) reveals a significant uptick in pet insurance coverage for domestic dogs and cats in the United States in 2023, encompassing over 5.6 million pets—a 17% increase compared to the previous year. Notably, this figure represents more than a twofold rise since 2019, highlighting the escalating adoption of pet insurance policies.

Despite this notable growth trend, it’s essential to acknowledge that the percentage of pets covered by insurance remains a minority within the larger population of American households. According to the 2023-2024 American Pet Products Association National Pet Owners Survey, the United States has approximately 65 million households with dogs and nearly 47 million households with cats. Given these statistics, while the expansion of pet insurance is significant, it still caters to only a fraction of the total pet-owning demographic in the country.

What pet insurance costs?

As per NAPHIA’s 2023 data, the average annual premiums for comprehensive accident and illness coverage are approximately $676 for dogs and $383 for cats. This equates to an estimated monthly expense of $56 for dogs and $32 for cats.

Alternatively, selecting an accident-only policy reduces the annual premium to $204 for dogs and $116 for cats. While these plans provide coverage for injuries resulting from accidents such as vehicular collisions or ingestion of harmful substances, they do not cover illnesses.

It’s crucial to recognize that premium rates are subject to variability influenced by various factors, including the age and breed of your pet, prevailing veterinary care costs in your area, and the specific terms and conditions of the insurance policy chosen.

As pets age and become more susceptible to health issues, premium rates typically rise accordingly. Consequently, there’s a risk of affordability challenges leading to potential discontinuation of coverage precisely when the need for veterinary care intensifies.

To assess the trajectory of premium increases over time, we examined sample quotes from Pets Best, a leading pet insurance provider, for a medium-sized, mixed-breed dog residing in Katy, Texas. The following monthly premiums were observed for a policy featuring a $5,000 annual coverage limit, $500 deductible, and 80% reimbursement rate:

Monthly rate

3 months


2 years


4 years


6 years


8 years


10 years


12 years


Although the monthly increments may seem subtle initially, it’s imperative to contemplate their cumulative effect over the entirety of your dog’s lifespan, typically extending over 12 years.

The cost of pet insurance for a dog over time

Furthermore, we acquired quotes from Pets Best for a domestic shorthair cat domiciled in the same ZIP code. The premium rates offered cover up to age 14, acknowledging the extended lifespan typically associated with feline companions.

Cat’s age

Monthly rate

3 months


2 years


4 years


6 years


8 years


10 years


12 years


14 years


Although the overall premiums for cats may initially appear lower, there is a discernible increase in premium rates as cats age, echoing the pattern observed with dogs.

The cost of pet insurance for a cat over time

In the long run, sustaining pet insurance coverage for the entirety of your pet’s life is anticipated to require a significant financial investment, potentially reaching thousands of dollars in premiums. It’s crucial to note that the figures presented are illustrative and reflect the offerings of a single pet insurance provider in a particular geographic region. Therefore, conducting comprehensive research and evaluating multiple insurance options is recommended to secure the most suitable coverage for your specific situation.

What pet insurance pays for

The fundamental benefit of pet insurance is its capacity to offer financial assistance when confronted with expensive veterinary diagnoses. Nevertheless, it’s essential to temper expectations, as the majority of insurance plans do not provide full reimbursement for every veterinary expense accrued.

Deductibles, limits and payouts

Most pet insurance policies incorporate an annual deductible, representing the initial amount you must cover before the insurer commences coverage. Following the fulfillment of your deductible, the majority of plans reimburse a predetermined percentage of your veterinary expenses, usually between 70% and 90%. Additionally, policies may impose an annual maximum payout limit.

However, it’s crucial to acknowledge that insurance providers may employ different methodologies regarding deductibles and reimbursement rates. While some insurers deduct the deductible first before calculating the reimbursement percentage, others may apply the reimbursement rate even before the deductible is met, necessitating a higher out-of-pocket expenditure before eligibility for reimbursement.

For example, suppose you’ve chosen a plan with a $500 deductible, offering coverage up to $10,000 annually with an 80% reimbursement rate. If your dog requires a $2,000 surgical procedure and you haven’t contributed to the deductible yet, the reimbursement amount would either be $1,100 or $1,200, depending on the approach employed. The calculation unfolds as follows:

When the deductible is applied first: $2,000 – $500 deductible = $1,500. 80% of $1,500 = $1,200.

When the reimbursement rate is applied first: $2,000 x 0.8 = $1,600. $1,600 – $500 = $1,100.

Customization options are often available, allowing adjustments to the deductible or reimbursement rate to match individual preferences. However, such modifications typically entail corresponding adjustments to the premium cost.

What’s covered and what’s not

Even in instances where a pet insurance plan boasts no annual limit and offers 100% reimbursement, it’s essential to recognize that not all veterinary expenses may be eligible for coverage.

For example, routine procedures such as spaying or neutering, vaccinations, annual checkups, and dental cleanings typically require the purchase of additional add-ons for wellness and preventive care. This underscores a fundamental aspect of pet insurance: it primarily serves to mitigate the financial impact of unexpected and unforeseen veterinary expenses rather than routine costs associated with pet ownership.

However, one of the most critical exclusions across virtually all pet insurance plans pertains to pre-existing conditions. Generally, pet insurance policies extend coverage solely to new injuries or illnesses that occur after the policy’s inception, excluding conditions that the animal had before the policy came into effect. Consequently, attempting to procure pet insurance to offset the costs of pre-existing conditions, such as chemotherapy for a cat diagnosed with cancer, is unlikely to yield coverage.

Thus, the inherent value of pet insurance often lies in its utility for young and healthy pets rather than those already afflicted with chronic conditions.

Furthermore, lapses in policy coverage can exacerbate issues related to pre-existing conditions. For instance, if a policyholder experiences a period of unemployment leading to the inability to pay premiums for their pet’s coverage, subsequent reinstatement of the policy may result in all prior ailments being deemed pre-existing conditions, including those previously covered under the initial plan.

For comprehensive information regarding coverage inclusions and exclusions, we recommend consulting our guide to pet insurance coverage.

The cost of veterinary care

According to survey data compiled by the American Pet Products Association (APPA) in 2022, dog owners incur an average annual expenditure of $472 on surgical veterinary visits and $250 on routine veterinary visits. Conversely, cat owners exhibit lower annual costs, with average expenses totaling $232 for surgical veterinary visits and $198 for routine veterinary visits. It is noteworthy that routine care expenses are typically excluded from standard pet insurance coverage unless additional premiums are paid for supplemental coverage.

Outlined below are the predominant categories of pet insurance claims for dogs and cats, as delineated by the North American Pet Health Insurance Association (NAPHIA) based on 2021 statistics, the most recent available.



1. Urinary tract infection.

1. Urinary tract infection.

2. Otitis/ear infection.

2. Diabetes.

3. Gastroenteritis.

3. Vomiting/emesis.

4. Diarrhea.

4. Kidney disease.

5. Dermatology/skin conditions (allergies, irritation, infections, mass).

5. Hyperthyroidism.

6. Arthritis.

6. Gastroenteritis.

7. Allergies.

7. Diarrhea.

8. Lameness.

8. Upper respiratory infection.

9. Vomiting.

9. Respiratory.

10. Seizure.

10. Cancer/growth/oncology.

11. Ophthalmology/eye conditions.

11. Inflammatory bowel disease.

Source: NAPHIA 2021 State of the Industry Report

While certain conditions listed may necessitate relatively minor and cost-effective treatments, such as the resolution of a urinary tract infection through a course of antibiotics, others may entail significantly higher expenses.

For instance, a prevalent affliction among dogs is mast cell tumors, which, if diagnosed, often require surgical intervention for removal, with associated costs ranging from $500 to over $1,000. In instances where tumors prove to be aggressive or surgically challenging, additional treatment modalities such as radiation or chemotherapy may be recommended by veterinarians, incurring expenses amounting to thousands of dollars.

The financial viability of pet insurance hinges on the likelihood and severity of health conditions encountered by your pet over its lifetime. While those with pets primarily experiencing minor health issues may find themselves paying more in premiums than they receive in reimbursements, the potential financial relief provided by insurance in the event of a serious medical crisis underscores its value.

What Does Pet Insurance Cover?

The primary distinction between human health insurance and pet insurance lies in the reimbursement structure. Unlike human health insurance, which often operates on a direct payment system to healthcare providers, pet insurance plans typically operate on a reimbursement basis. Under this model, pet owners initially pay for veterinary services out-of-pocket and subsequently submit a claim to the insurance company for reimbursement. Additionally, unlike human health insurance, pet insurance lacks provider networks, allowing policyholders to seek veterinary care from any licensed practitioner, with subsequent bill submissions to the insurance provider.

Comprehensive accident and illness pet insurance plans typically encompass a range of conditions and treatments, including but not limited to:

– Treatment for broken bones
– Management of toxic ingestion incidents
– Dental care for conditions such as gingivitis
– Chronic ailment management, such as diabetes
– Coverage for breed-specific conditions like hip dysplasia
– Emergency veterinary care
– Surgical interventions
– Diagnostic procedures
– Hospitalization and associated surgical procedures
– Prescription medication coverage

In contrast, accident-only pet insurance plans exclusively cover veterinary expenses arising from accidental injuries, such as torn ligaments or accidental ingestion of harmful substances. These plans do not extend coverage to veterinary expenses associated with illnesses, such as ear infections or cancer.

Furthermore, certain pet insurance plans offer optional wellness or routine care coverage as an add-on feature. This supplementary coverage encompasses expenses related to routine preventive care, including routine check-ups, microchipping, vaccinations, and flea/tick prevention treatments.

What Does Pet Insurance Not Cover?

Common exclusions in pet insurance policies typically include the following:

1. Experimental Treatment: This category encompasses treatments deemed experimental, investigational, or not aligned with the standard of care endorsed by the veterinary medical board in your respective state.

2. Food, Dietary, and Nutritional Supplements: Typically, expenses related to your pet’s diet are not covered by pet insurance; however, certain plans may extend coverage to prescription food and supplements.

3. Grooming: Services such as baths, dips, nail trims, and shampoos are commonly excluded from coverage under pet insurance policies.

4. Non-Veterinary Expenses: This includes miscellaneous expenses such as licensing or certification fees, compliance with government regulations (e.g., dog licensing), record access or copying charges, and waste disposal services.

5. Pre-existing Conditions: Pet insurance policies often exclude coverage for pre-existing conditions, comprising illnesses and injuries that your pet experienced before the commencement of coverage. While some plans permanently exclude pre-existing conditions, others may offer coverage under specific circumstances. For instance, ASPCA pet insurance provides coverage for “curable” pre-existing conditions if the pet has been symptom-free for a specified duration, typically 180 days. If the condition recurs after this period, it is considered a new problem and may be covered accordingly.

Pet Insurance Deductibles, Reimbursement and Coverage Caps

When choosing a pet insurance policy, an essential decision revolves around determining the deductible amount, which signifies the initial out-of-pocket expense before insurance coverage begins. Deductibles typically range from $50 to $1,000 in pet insurance policies and come in two primary types:

1. Annual Deductible: With this setup, you must meet the deductible once per policy term. Once fulfilled during the policy period, you’re not required to pay it again until the subsequent policy term begins.

2. Per-Condition Deductible: This structure involves paying a deductible for each distinct condition or incident requiring veterinary care. For example, if your pet has chronic allergies, you’d pay a deductible for related medical expenses. Once the deductible is met for a specific condition, subsequent veterinary expenses for that condition aren’t subject to further deductible payments. However, if your pet develops a new condition, a new deductible would apply.

In addition to selecting a deductible amount, policyholders must also choose a reimbursement level, indicating the percentage of veterinary expenses covered by the insurer after meeting the deductible. Common reimbursement levels include 70%, 80%, or 90%, although some insurers, like Figo, offer 100% reimbursement.

Moreover, pet insurance companies may allow setting an annual coverage cap, such as $5,000. While others, such as Pets Best, TrustedPals, and Spot, offer policies with unlimited annual coverage.

Are Pet Owners Buying Pet Insurance?

The adoption of pet insurance has experienced a notable surge in popularity, evidenced by a 28% increase in the total number of insured pets in the United States from 2020 to 2021, as per data compiled by the North American Pet Health Insurance Association (NAPHIA). Dogs constitute the majority of insured pets, comprising 82% of the total, while cats represent the remaining 18%.

This upward trend in pet insurance adoption can be attributed, in part, to the impact of the pandemic. Findings from a survey conducted by Forbes Advisor revealed that over three-quarters (78%) of pet owners reported acquiring a pet during the pandemic, highlighting the increased demand for pet ownership during this period.

Alternatives to pet insurance

If the option to purchase pet insurance does not align with your preferences, there are alternative methods available to finance the medical care of your beloved companion.


An alternative method for financing veterinary expenses involves allocating monthly contributions to a high-yield savings account specifically designated for this purpose.

This strategy provides flexibility, as funds remain accessible for other needs should your pet remain in good health. However, it’s essential to recognize the potential drawback: the accumulated savings may fall short of covering unexpected and costly veterinary emergencies, especially if they occur soon after acquiring your pet.

Financial assistance

In situations where financial constraints impede access to veterinary care for your pet, several avenues for assistance are available. Your veterinarian may offer the option of establishing a payment plan, allowing you to spread out the costs over time. Alternatively, exploring alternative clinics that provide more cost-effective treatment options for your pet’s needs could be worthwhile.

Moreover, initiating a crowdfunding campaign offers the opportunity to rally the support of friends and family, pooling resources to cover veterinary expenses. Charitable organizations may also offer assistance through grants or other forms of support. Resources compiled by reputable organizations, such as the Humane Society of the United States, can provide valuable guidance and assistance in navigating available avenues of support.

Amy Danise

Amy Danise is the managing editor for and Forbes Advisor's insurance section, covering auto, home, renters, life, pet, travel, health, and small business insurance. With over 30 years in the insurance sector, she specializes in simplifying complex insurance topics into actionable information. Amy collaborates with her team to translate insurance jargon into clear language for consumers, helping them understand insurance costs and find top-rated companies. Leveraging her extensive industry contacts, she develops Forbes Advisor's insurance content and analyzes state regulatory filings for insights. Amy's expertise has earned her features in major news outlets like The New York Times and The Wall Street Journal. She holds a Bachelor's degree in American Studies from Wesleyan University.

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