Should You Have Pet Insurance?


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Ever been to the vet and seen a flyer or advertisement for pet insurance, and wondered if it was a good idea to protect your animals with pet insurance?

What Is Pet Insurance?

Pet insurance is similar to health care insurance for people, but it pays for veterinary treatment of the insured person's ill or injured pet.   Companies such as Embrace (through USAA), Trupanion, and VPI offer a wide variety of plans to fit every situation.

Should You Buy Pet Insurance? How Much Does It Cost?

Costs vary dramatically depending on the type of pet, breed, age, coverage and deductible that you choose.  Most people I've asked pay about $40 per month for each dog, with cats ranging around $20 a month.

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What Does It Cover?

Every pet insurance plan covers different things, so be sure that you are comparing similar policies.  Some cover all sort of veterinary care, such as immunizations and check-ups.  Other policies only pay for major medical issues.

Keep in mind that most policies have exclusions for pre-existing conditions or congenital issues with certain breeds.  the number one complaint against pet insurance companies is that things aren't covered.  Be sure to read the policy carefully before making a decision.

Each policy will have its own deductible, which can be a per-incident deductible or a per-year deductible.  Common deductible amounts are $100, $250, or $500, with lower  monthly premiums for higher deductibles.  Then, most policies have some sort of co-payment, meaning that the pet owner is responsible for a portion of the costs that exceed the deductible.  Co-payments are commonly percentages, such as $20, but may be fixed costs, such as $25 for an overnight stay at the vet.

In addition, pet insurance policies may have three types of caps on benefits:  a per-incident cap, a per time period cap, and a lifetime cap.  Be sure you understand how each of these is defined.

Should You Purchase Pet Insurance?

Unfortunately, there is no single right answer.  Every situation is different.  Many experts recommend that you take the same money you would spend on insurance premiums and save it in a separate savings account designated for pet medical needs. If you do decide to purchase pet insurance, consider a major medical policy with a higher deductible to save on the monthly premiums.

Personally, I am not in favor of pet insurance policies.  By the time you include the monthly premiums, the deductible, and the co-payments, and then consider the caps, it can be better to maintain your own pet care savings account.  However, my answer isn't right for everyone.  If you decide that pet insurance is right for your family, ask these questions before choosing which policy to purchase:

How To Choose A Pet Insurance Plan

  • Is there a physical exam required to get coverage?

  • Is there a waiting period?

  • How much are the premiums?

  • Can you see any veterinarian, or do they have to be participating providers?

  • What percentage of the bill do they pay — after the deductible?

  • Are payments capped in any way?

  • Are there co-pays?

  • Is there a waiting period before coverage begins?

  • Does the plan cover pre-existing conditions?

  • What about chronic or recurring medical problems?

  • Does the policy cover cancer?

  • Does the policy cover dental care?

  • Does the provider bill the insurance company directly, or do you pay out of pocket and file for reimbursement?

  • Does the plan use a benefit schedule, or limit claims to "usual and customary" charges, or does it cover the actual expenses?

  • How quickly are claims paid?

  • Are prescription drugs covered?

  • Are you covered if you travel with your pet?

  • Do the coverage and premiums change as your pet ages?

  • Does the policy pay if your pet is being treated and dies?


Understanding the pet insurance plans is key to making a good decision about whether to purchase pet insurance, and which plan to buy.  Ask lots of questions and be sure that you understand the policy.  At just $25 per month, you'll be spending $3,000 for 10 years of coverage.  Be sure you know what you're buying!

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