Considering pet insurance? See if it’s right for your pet (and your budget).

Many people believe that a family isn’t complete without a pet. Pets can add joy and companionship to your home, becoming an irreplaceable part of daily life. They can also strain your budget – especially if they become injured or seriously ill.

Pet insurance can help you manage your pet’s care costs by covering some or all of its veterinary expenses, similar to health insurance for humans. For many families, it’s a wise investment that helps ensure that your pet can get the care it deserves. However, pet health insurance may not be the best option for everyone. See if it’s right for your family by learning about the potential benefits and drawbacks.

The Benefits

Pet insurance can be a wise investment for cutting costs, and the different coverage options allow you to choose a plan that best fits your needs – and your budget.

Pet health insurance is a rapidly growing segment of the insurance industry, with more companies offering pet coverage than ever before. The increased competition means more coverage and plan options for you to choose from.
Varied Coverage Options
Pet insurance comes in different tiers or levels of coverage, similar to human health insurance plans. Plans may include accident, illness, and/or wellness coverage. At one end of the spectrum are low-premium, high-deductible plans that cover emergency veterinary costs due to accidents, such as poisonings and broken bones. They’re ideal for pet owners with tight budgets who want protection in case their pet experiences an injury or similar event.

At the other end of the spectrum are high-premium, low-deductible plans. They may cover more veterinary expenses, such as wellness care (like vaccinations) or a higher percentage of each veterinary bill. Once you meet your deductible, the savings can help make up for the monthly premium. These plans are best for families with more wiggle room in their budgets or who have pets with chronic conditions that need frequent checkups.

There are also plans that fall into the middle range. They may include both accident coverage and illness coverage, which can help cover costs related to acute or chronic conditions, such as ear infections or skin diseases. Families who don’t want wellness coverage but want more than minimal accidental coverage may benefit from these plans.

Some insurers may allow you to combine different coverage options to create a customized plan for your pet, such as accident and illness coverage with a wellness care or travel protection add-on. Customized plans let you get the coverage you need without paying for coverage you don’t, making it more cost-efficient.

Broad Species Protection
Cat and dog insurance plans are widely available, as they’re the most popular pet species, but coverage for other animals is growing. There are plans for virtually every type of pet, including horses, birds, amphibians, reptiles, rabbits, ferrets, hamsters, and guinea pigs. No matter what type of pets your family loves, you’re likely to find a plan to cover them.

Freedom to Choose
Almost all pet insurance plans allow you to take your pet to any licensed veterinarian you choose. There’s no concept of in-network versus out-of-network providers. Because claims are handled by you and the insurer – not the veterinarian – there’s no worrying about whether your preferred vet will accept your insurance. You’ll be able to visit any licensed veterinarian at any vet clinic or animal hospital you choose.

A Literal Lifesaver
Without insurance, you may be unable to pay for lifesaving care if your pet gets injured or falls seriously ill. In severe situations, you may be forced to decline treatment due to financial limitations. This can lead to guilt and regret for years to come, and it can be a heartbreaking experience for everyone involved. Insurance can prevent situations like these, giving you peace of mind.

The Drawbacks

Despite all its benefits, pet insurance does have potential drawbacks that merit consideration.

Difficulty Comparing Plans
Shopping for pet insurance plans can be confusing. It may be unclear what specific situations or services are covered under broad terms like “accident” or “illness,” and what’s covered under those terms can differ by insurer. Before enrolling in a plan, read the fine print so you’re aware of its specific exclusions (conditions or services that aren’t covered).

Out-of-Pocket Costs
Regardless of the plan you choose, you should anticipate out-of-pocket costs, such as deductibles, copays, and amounts over the plan’s limit. A deductible is the total amount you have to pay each year before your insurance begins covering costs. Copays are a set amount that you pay per visit after you’ve met your deductible. The plan limit, or the maximum annual benefit amount, is the most your insurance will pay each year.

Treatments and services that aren’t covered will vary by plan, but you’ll have to pay full price for uncovered items. Dental care, grooming, elective procedures (like declawing), and fees not related to care (like administrative fees) are often not covered in any plan unless explicitly stated otherwise. Even for covered services, most plans cover only a set percentage of the total bill, usually between 70% and 90%. High-premium plans may have unlimited annual benefit amounts and cover 100% of expenses after the deductible.

Another consideration is that pet insurance is a reimbursement-based system. The majority of plans will reimburse you after the vet visit, meaning you’ll have to pay the full amount to the vet upfront. While the insurance company will compensate you for the amount they’ll cover, many families simply don’t have the savings to cover large bills at the time of service. You could put the initial cost on a credit card until your reimbursement comes in, but if the claim takes too long to process, you may be stuck paying interest on the charged amount.

Limited Eligibility
Most pet plans won’t cover preexisting conditions, like arthritis or diabetes. Some curable conditions, like minor infections, might be approved if they have been completely resolved and dormant for several months. Breeds that are prone to health conditions may cost more or be denied coverage, and pets usually have to be several weeks of age to be eligible for coverage. Senior pets may be denied coverage, but even if they’re approved, it will likely be difficult to find coverage for them that makes financial sense.

Changes As Your Pet Ages
As your pet gets older, its risk for developing health conditions increases, which insurers take seriously. Your provider may increase your monthly premiums significantly over your pet’s life, and some may drop you completely if your pet develops a chronic condition. This can be especially frustrating if you’ve paid premiums for years only to be kicked off the plan when you need it the most. Always ask your insurer if coverage is guaranteed as long as premiums are paid.

Insuring Your Pet’s Future

As a member of your family, your pet deserves the very best. Pet insurance can help make sure it gets the care it needs by reducing veterinary expenses. While pet insurance does have its limitations, its customizable and diverse coverage options make it more accessible, and it can be invaluable to your family and finances, especially in emergencies. Without it, you could be faced with the impossible choice of saving your pet’s life or taking on massive debt, with either outcome haunting you for years.

Because pet plans still require upfront payments for vet bills, don’t cover all costs, and have eligibility limitations, they may not make sense for everyone. If pet insurance isn’t a good fit for your finances and family, consider allocating the money you would pay on premiums to an emergency savings fund instead. This can help cover unexpected or expensive vet bills. However, forgoing insurance means accepting the risk that your pet could get sick or injured before you have enough saved to cover the costs.

Whatever strategy you decide, it’s important to be prepared for the possibility of facing a large veterinary bill someday, which means focusing on your financial health.