Summer 2012 Magazine

Pet Health Insurance: Pros and Cons

By Nancy Marano

Most people depend on health insurance to help with medical bills or expensive tests and medicine. But what about pet health insurance? More and more people are looking into various types of pet health insurance to help them pay for treatment if their dog or cat accidentally swallows a key or develops a tumor and needs expensive treatment.

According to the American Pet Products Association (APPA), overall spending in the pet industry surpassed $50 billion in 2011, an all-time high. Their reporting shows spending grew from $48 billion in 2010. APPA also projects a steady 3.8 percent growth rate through 2012, with nearly $53 billion in overall pet spending.

Pet insurance for 2011 is estimated at $450 million and projected to grow to more than $500 million in 2012. This is still only about three percent of pet owners.

The first pet insurance policy was written in Sweden in 1890. It focused on horses and livestock. In 1947, the first pet insurance policy was sold in Britain. By 2009, Britain had the second-highest level of pet insurance in the world (23%), behind only Sweden. In 1982, the first pet insurance policy was sold in the United States. It was issued to television's Lassie by Veterinary Pet Insurance (VPI).

There are many choices in pet insurance and you need to ask yourself some questions before you decide whether to buy a policy. Let's look at some of the pros and cons.


  • Takes away anxiety over expenses. With the advances in veterinary medicine, the cost of diagnostic tests such as MRI's or treatments such as chemotherapy should your animal develop cancer can run into thousands of dollars. These charges can quickly deplete your budget and savings and possibly lead to decisions that wouldn't be made if funds were available for treatment.
  • Wide variety of pet insurance companies and plans available. You have options if you decide to choose pet insurance. Some plans allow you to customize the care you think you'll need. Others provide multiple levels of coverage.
  • Some plans cover routine care. These cover such items as physical exams, flea treatment and shots. These policies cost more up front but may be worth it depending on what your veterinarian charges for these services.
  • Some employers offer pet insurance as an employee benefit. Be sure to check whether this is something your employer offers. Employers don't usually pay the premiums but they often get a better deal for their employees through group discounts.


  • May cost more than it's worth. Insurance is based on collecting more in premiums than the company pays out in benefits. If your companion animal lives a long, healthy live, it may not be worth it for you to buy pet insurance. However, if your animal does run into problems, having the insurance will help. Basically you must decide how much risk you want to take.
  • Policy limitations. Be sure to read the fine print in the policy before you sign on the dotted line. Some policies don't cover pre-existing conditions, hereditary defects, dental problems, chronic diseases or older animals. Know the limitations in the policy you are considering.
  • Out-of-pocket costs. Most policies expect you pay the veterinarian at the time of service, submit your claim to the insurance company and then they reimburse you a percentage of the original service cost. Make certain you understand how your policy works.
  • Choice of veterinarian. Some plans may require you to see veterinarians within a certain network. If your veterinarian is not in the network, it means you would have to switch to someone else for service.

If you decide to buy pet insurance, your work is not finished. You need to compare policies and be certain you understand everything the insurance will and won't do. Here are some questions you should ask before buying anything.

  • Know how much the plan costs and what it covers. Be sure you know exactly what it covers, how much you will pay per year, what the deductibles and co-pays are, what is excluded, what are the limits on the policy, what are the annual caps on coverage and the renewal rate increases.
  • Check whether the company you are interested in is registered in your state. Any pet insurance company you choose should be registered with the insurance regulators in your state.
  • Is wellness coverage available? Does the policy just cover illnesses and accidents or does it provide coverage for normal veterinary expenses such as spay or neuter surgery, dental care and annual physicals.

The typical cost of pet insurance for a cat is $15-$18 per month. Typical pet insurance costs for a dog are $22-$28 per month. These costs depend on the age of the animal. If you take out pet insurance when the animal is young and healthy, it will cost less than if you wait until an animal is older or has had a health problem.

If you decide that pet insurance isn't for you, then it is wise to set aside something monthly in a fund for your animal companion's veterinary costs. Expenses can run up quickly if you are hit with an emergency so you want to plan ahead for this possibility. Then you won't be forced to make a decision about your animal companion's health based on cost.

Nancy Marano is an award-winning writer who is owned by three cats, Sammy, Callie and Max. Callie and Max are new additions to the family. She is a member of the Cat Writers' Association and Dog Writers of America.

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