Is pet insurance really necessary?

Pet ownership is a dream for many and one that is within relatively easy reach. After all, how much could an animal companion set you back? Surprisingly, quite a bit.

Americans spent $72.56 billion on their pets in 2018, and after food costs, the highest expense was veterinary care. According to the American Pet Products Association, pet owners paid $18.11 billion in care costs, which are only expected to rise.

While most healthy pets may only need regular check ups that can be planned for in your monthly budget, there is always a chance that an accident or infection could prompt emergency care that comes with a price tag of $1,000 to $4,000 or even more. One way to take away the sting of an enormous vet bill is pet insurance.

What does pet insurance cover?

Pet insurance is available from various providers, and online tools allow consumers to compare prices and features associated with different policies. Generally, pet insurance is offered as a reimbursement plan. You pay the vet bill, then file a claim to be reimbursed up to the level indicated in your policy.

An insurance policy should specify the level of coverage your pet will receive, including for routine or wellness care, emergency room visits or extensive care. It should also explain your costs, such as premiums, co-pays and deductibles. When selecting a plan, you should be able to choose the deductible and the reimbursement level – typically no more than 90% – for your pet’s care.

The premium will depend on your plan’s specifications as well as your pet’s breed, age and overall health. On average, premiums can run anywhere from $10 to $100 a month, with the general consensus that $30 to $50 a month for good coverage is the norm. Some pets will incur higher costs; dogs, for instance, typically have higher premiums than cats.

Some insurance carriers offer add-on options, such as dental care and travel insurance for pets. Other features you may want to research include coverage of pre-existing conditions (if those are an issue), exclusions for specific pets that may be deemed high risk, and how premiums may increase with a pet’s age.

Is pet insurance worth it?

Routine veterinary care may be manageable within your regular budget, and insurance for a healthy pet may not save you money in the long run. Before you invest in a policy, ask your vet for estimates on your pet’s regular care to adjust your budget and avoid surprises. Keep in mind that most pet owners come face-to-face with an emergency vet bill at least once in their pet’s life. If a pet is aging or developing health issues, pet insurance may be a wise investment.

Regardless of whether you choose pet insurance, be sure to set aside enough money in your emergency fund to cover an unexpected vet bill, at least $1,000 or $2,000 on top of your own savings needs. Even if you have pet insurance, remember that you will need to have finances available to pay up front, and reimbursement will likely take at least a couple of weeks. Once the insurance check comes through, you can replenish your emergency fund.

Finally, if you have several pets and could benefit from insurance coverage, inquire about a discount for multiple pets. Many providers will offer some savings.

Get recommendations

If you decide pet insurance is the right move, ask around for recommendations as you do your research. Your veterinarian is an excellent source of information, as are your fellow pet parents. Whichever route you choose, keep your pet in mind when building a monthly budget and an emergency fund; you’ll be financially prepared to enjoy an awesome life together.