Is Pet Insurance Worth It?

1 August 2022

You'd do anything to keep your furry friend happy and healthy. But is it worth the price tag of pet insurance? Find out what insurance for dogs and cats does and doesn't cover, what it costs, and how Tractive GPS can help.

cat and dog in grassy field

With vet costs higher than ever, you may be considering pet insurance. After all, you want to do what’s best for your four-legged family. Which includes knowing they’ll get great medical care, quick help in case of emergency, and all they need to enjoy a happy, healthy life.

To help you decide, we’re going to talk about what pet insurance is, what types of coverage are out there, and how much it costs. We’ll also dig into what is typically covered in pet insurance coverage – and what often gets left out.

By the end, you should have a clear idea of how pet insurance works and what makes it more expensive. And be able to decide if it’s for you.

FYI – Sleep and activity levels can tell you a lot about your buddy’s health, and spot issues early on. You can track both with Tractive GPS, and avoid accidents by seeing if your cat or dog is getting too close to trouble.

What is pet insurance?

Pet insurance protects you against the unexpected. And against big bills! You pay your insurer monthly and in return, they promise to take on some (or all) costs if your pet needs medical help. 

There’s tons of different insurance policies. But generally, they cover things like emergency vet visits, routine checkups – sometimes even dental care and anti-parasite treatments.  

Benefits of pet insurance

Pet insurance gives you a nice cushion in case you need to pay for unexpected medical treatments. Without it, you might be looking at big bills you have to pay right away.

With insurance, you just need to cover a small bit of the total cost, while your insurer handles the rest. Most pet insurance policies cover 70% to 90% of costs. To be specific, the costs that go above what you’re expected to cover yourself (a.k.a. your deductible – we’ll get to that in a minute).

Knowing insurance will cover a large chunk of medical expenses lessens your financial burden. As such, it lets you decide to go ahead with more extensive (and more expensive) medical treatment options than if you had to rely on your savings. Insurance is especially good if your buddy needs crucial but costly care. For example, for surgeries or cancer treatments.

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How does pet insurance work?

Pet insurance plans are paid monthly, quarterly, or annually. When you get one, you’ll get a detailed policy telling you exactly what’s covered, what you can expect to get back, your deductible, and the annual maximum that insurance will cover.

You can take your pet to any licensed vet, and your pet insurance provider will cover expenses in line with your policy. However, some pet insurance providers allow certain vets to bill them directly. That means you don’t have to pay upfront.

Should your pet ever require medical attention, you’ll likely have to pay your veterinarian directly for any expenses and submit the receipts to your insurer. So hold on to the paperwork after your vet visit! You might need it when making your claim.

Once you’ve filed your claim, your insurance provider will review it and decide if it’s something they have to cover. Assuming it is, you should usually receive the funds within 14 days.   

What does pet insurance cover?

Each pet insurance policy is slightly different in terms of what it covers, and how much. That’s why it’s smart to start by comparing different options before you make a decision.

Here are some things a pet insurance policy might cover:

  • Broken bones, poisoning, wounds 
  • Illness – like ear infections, or diabetes 
  • Genetic conditions – like eye disorders or hip dysplasia
  • Physical exams
  • Tests – like blood scans or x-rays
  • Alternative therapies – like acupuncture
  • Medical treatments
  • Emergency care
  • Hospitalization
  • Surgery and anesthesia
  • Prescription medication 
  • Dental injuries or cleaning 
  • Routine flea, tick, or parasite treatments
  • Euthanasia

What isn’t covered by pet insurance?

Before you pick a pet insurance policy, be crystal clear on what it doesn’t cover. Again, every provider is different, so do your homework and compare policies. The following tend to not be covered.

Pre-existing conditions

Most insurers (unfortunately) don’t cover pre-existing health conditions. Another thing to watch out for? If some new health condition pops up between when you make your first payment and when your insurance kicks in, it won’t be covered either.

Pet insurance companies that cover cats or dogs with pre-existing conditions are rare. AKC, for example, claims to be the only US provider to do so. But even then, only after a 12-month wait period. 

Cancer treatments (sometimes)

According to the American Veterinary Medical Association, about 50% of dogs over 10 years old will develop some form of cancer. And one in five cats will get cancer in their lifetime1. Still, some pet insurance policies exclude cancer from their coverage. Read the fine print of your pet insurance policy carefully to see if it covers cancer treatments. That way, you can avoid nasty surprises later.

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cat and dog in grassy field

Senior pets may be excluded from certain types of coverage

Many insurance providers don’t cover older pets at all, while others offer minimal coverage after a certain age. Since they are considered more prone to health issues, they may only get a basic policy covering injury, and not illness or other issues.

To make things more confusing, each insurance provider has a different idea of what makes a senior dog or cat.

Some companies offer better coverage for senior pets, so research carefully. In any case, expect to pay higher premiums for policies that cover senior pets. 

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Burial or cremation

We don’t want to think about it. But the reality is, there are costs involved with saying goodbye to your buddy. Many pet insurance policies cover the cost of euthanasia if it helps avoid our furry friends suffer. However, pet insurance policies won’t cover cremation or burial.

Breed exclusions

Certain dog breeds are excluded from pet insurance coverage, or have to pay higher premiums. That’s because they are more at risk of genetic health conditions. Generally, purebreds cost more to insure than mixed breed dogs and cats who are less likely to have such issues.

Experimental procedures

Pet insurance policies do not cover experimental procedures such as DNA testing or cloning. 

Grooming

Pet insurance providers will not cover grooming expenses, even if they are vital to your pet’s wellness routine.

How much is pet insurance?

Pet insurance costs depend on many factors, such as:

  • Breed: Purebred pets typically cost more to insure than mixed breed pets, as they are predisposed to more health conditions. Large pets generally cost more to insure as well. 
  • Age: It’s always cheaper to insure young pets, because they are less likely to have health issues.
  • Location: Vet care prices differ significantly based on region, which naturally impacts pet insurance premiums. For instance, you’re likely to pay higher premiums in New York than in Cleveland.

The total cost also depends on the amount of coverage you go for, which includes these factors:

  • Reimbursement rate: This is how much of your (eligible) vet expenses your insurance plan covers. Generally, rates go between 70% and 100%. The higher your rate, the higher your monthly costs.
  • Annual deductible: This is how much you pay each year before your insurance begins to reimburse you. The higher your deductible, the less likely it is that you get your costs covered. Deductibles range from $50 to $1,000 and insurance plans with high deductibles have a lower monthly cost.
  • Annual coverage limit: This is the maximum your insurance plan will pay you each year. So, if your annual coverage limit is $3,000 and your pet needs $5,000 of vet care throughout the year, you’ll only get up to $3000 back. The higher your annual coverage limit, the more your monthly insurance plan will cost. Payout limits can vary dramatically. Some cap out at $5,000, while some go up to $30,000. Some pet insurance plans even have unlimited annual coverage limits! 

The average cost of pet insurance around the world

Your monthly pet insurance premium will vary depending on all the factors mentioned above. But, here’s a general estimate of what you can expect to pay for pet insurance for dogs and cats. 

Cost of dog insurance

  • United States: $47/month
  • Canada: $39/month
  • UK:  £25/month1
  • Australia: $40/month

Cost of pet insurance for cats

  • US: $29/month
  • Canada: $29/month
  • UK: £10/month
  • Australia: $21/month
cat sitting in grass

Different options for pet insurance

There are several different types of pet insurance coverage – your premium will be influenced by how much coverage you go for.

Accident-only insurance

This type of pet insurance policy only covers accident-related expenses. So, if your dog is hit by a car, or if your cat is attacked by a dog, you’d be covered. If your buddy gets poisoned after eating something toxic, that would be part of the package too. Accident-only coverage usually has lower monthly costs, but still provides coverage when you need it the most. Often, this is the only type of coverage available for senior pets. 

Accident and illness insurance

Accident and illness insurance will cover a good portion of your pet’s medical expenses. Not only will your pet be covered for accidents as discussed above, but also for illnesses such as diabetes, genetic conditions, and even cancer.  

Accident and illness insurance with wellness coverage

This is the most comprehensive type of pet insurance plan available. Usually, wellness coverage is offered as an add-on to an accident and illness plan. Wellness coverage includes things like routine flea and tick treatments, vaccinations, and other preventative care. Pet insurance plans that are this comprehensive come with the highest monthly premiums. 

How much does it cost to go to the vet?

Before you decide to invest in pet insurance, find out how much vet care actually costs you. Keep in mind that prices can vary dramatically depending on where you live, what type of care you need, and which vet(s) you visit.

Here are some average costs of veterinary care in countries around the world:

  • United States: An annual checkup for a dog or cat will cost between $50 and $300, depending on whether any vaccines or tests are administered. Unexpected vet care may cost anywhere from $800 to $1500.
  • Canada: Routine vet check-ups in Canada may cost anywhere from $80 to $120, plus the cost of any vaccines or medications such as flea or tick treatment. The cost of emergency veterinary care varies dramatically, with $200 being the low end of the spectrum. At the high end, you may spend $1500 or much more depending on how serious the issue is2
  • UK: In the UK, a standard vet consultation costs around £55, but the fee may be higher for off-hours visits. There are additional charges for things like medications, vaccinations, tests, and x-rays.   
  • Australia: A standard vet visit in Australia may cost between $50 and $100, with vaccines averaging just under $100 per year. The cost of emergency veterinary care varies depending on the situation, but may cost anywhere from $1,000 to $3,500 and beyond3

Remember, prevention is the best medicine

Considering the cost of veterinary care and pet insurance, as well as how much you love your furry best friend(s), aim to prevent illness and accidents in the first place. Studies show that prevention is the best medicine after all, for dogs, cats and humans alike. Keep your pet safe, healthy and in tip-top shape with a healthy lifestyle, high-quality diet, and the right safety equipment. For example, using a leash, or reflective gear when walking your dog at night may already increase your pet’s lifespan.

Another way to keep your dog and cat healthy and safe is to track them with a GPS tracker. GPS dog and cat trackers from Tractive also come with built-in activity monitoring, so you can keep your pet fit and monitor sleep patterns, too. So you’ll rest easy at night knowing your pet’s getting enough exercise while also staying out of harm’s way.

Safety first: Consider adding a GPS tracker to your pet’s collar, which can help to minimize risk.

Is pet insurance worth it?

Pet insurance may be worth it in some scenarios, but it depends on your circumstances, coverage available, and cost of veterinary care in your region. 

If you live in a big city where vet visits are notoriously expensive, a pet insurance plan may give you peace of mind knowing your buddy can get the care they need without breaking the bank. On the other hand, if you live somewhere with low costs of living, veterinary care may be quite affordable, making a fancy pet insurance policy more of a luxury. 

You should also consider that while many pet insurance plans will reimburse a large percentage of medical expenses, you must often pay upfront. In other words, even if you have a fantastic pet insurance policy, you still need the cash to pay the bills.

Instead of pouring money into an insurance policy each month, you could put it into a dedicated vet emergency fund. That way, you’ll have cash on hand if you ever need it. However, if you can find a pet insurance policy that will bill your vet directly, it may very well be worth it. 

Before you buy a pet insurance policy, do some research on the cost of veterinary care in your area. Can you reasonably afford to pay out of pocket for most veterinary expenses? Next, consider your pet’s weak spots. Is their breed prone to any particular health problems? Finally, think about your budget. What makes sense, and how much can you put aside each month?

After all that, you should know best how to keep your buddy safe, happy and healthy.

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