Pets have a knack for working their way into your heart and becoming part of the family. They greet you at the door, cuddle you on tough days, and do goofy things that make you laugh. In return, you likely want to keep your pet as happy and healthy as possible. However, the costs of care can add up quickly — especially in the case of an illness or serious injury. So, is pet insurance worth it? Here are the key financial and emotional factors to consider.

Understanding the cost of pet insurance

Pet insurance works a lot like health insurance for people. It's primarily designed to help cover the cost of vet care if your pet gets injured in an accident or develops an illness or disease. But how much does it cost? There are four main pricing components to keep in mind: premiums, deductibles, coinsurance, and coverage limits.

Premiums

Pet insurance companies require you to pay premiums in order to get and keep coverage. Here are the average premiums for dog and cat pet insurance in 2023, according to the North American Pet Health Insurance Association (NAPHIA).

2023 average pet insurance premiums in the U.S.¹

Accident and Illness Coverage

Dog: $56.30 per month

Cat: $31.94 per month

The premium you get will depend on a variety of factors, such as your coverage level, pet type, location, reimbursement level, annual limit, and deductible amount.² For example, for a three-year-old, medium-sized female dog, the premiums range from $12.36 to $95.30, varying based on the deductible amount, reimbursement rate, and annual limit chosen.

Deductibles

A deductible is the amount insurers require you to pay before they start covering your eligible vet bills.³ Pet insurance deductibles can be per incident or per year, and generally range from $50 to $250.⁴ When getting insurance, you'll select your deductible amount from the provider's available range. Higher deductibles result in lower premiums but require you to pay more when your pet needs care.

Reimbursement rate

Once your deductible is paid, your pet insurance coverage will start paying thereafter. However, pet insurers don't typically cover 100% of the cost for the covered services your pet receives. You select a reimbursement rate when you sign up, often 70% to 90%, and get reimbursed for that percentage of your qualifying costs.

For example, suppose your pet insurance policy has an 80% reimbursement rate with a $500 deductible and your dog needs a $3,500 emergency surgery.⁵ You'd owe $500 for the deductible bringing the balance down to $3,000. You'd then pay the $3,000 and the insurer would reimburse you for $2,400 of that (80% of $3,000).

Like deductibles, reimbursement rates impact premiums. Lower reimbursement rates result in lower premiums but mean you'll pay a more of the net cost when your pet gets care.⁶

Coverage limits

Coverage limits cap the amount an insurer pays in claims and can apply on a per-term or per-claim basis. Once you've hit a policy coverage limit, you'll be responsible for 100% of the remaining costs. For example, if your annual policy limit is $10,000 but your cat requires $15,000 in covered services during a policy year, you'd be responsible for the remaining $5,000.

Cost example

Now that you know the basics of how pet insurance costs work, let's compare how much an emergency vet visit would cost with and without insurance.

Imagine you have a three-year-old female dog named Lucy. While Lucy starts the year out in great health, she ends up getting out onto the road one day and gets hit by a car. Fortunately, she survives but suffers several wounds and a broken rib. You take her to an emergency vet care center and receive the following bill:

• ER Exam: $200
• IV Catheter: $75
• IV Fluids: $75
• Pain Medication: $60
• Wound Treatment: $1,000
• Emergency Surgery: $2,500
• Total: $3,910

Without pet insurance, you'd be looking at $3,910 out of pocket for Lucy's emergency visit. However, here's how the cost could be reduced with coverage.

Policy 1 offers the lowest out-of-pocket cost for the emergency care visit, reducing it from $3,910 to just $481. However, Policy 2 offers the highest overall savings, $2,409, when factoring in the cost of the annual premiums. Policy 3 has the lowest premium, but will save you less than the other two policies with a total savings of $2,021.

Why pet owners decide to get pet insurance

Pet insurance can help you save on vet bills when something unexpected happens, but it can also offer significant emotional benefits that should not be overlooked. Here are a few scenarios that highlight why a pet owner might choose coverage and how they can benefit in multiple ways.

Realizes the risk and wants peace of mind

Jessica, a young professional, starts her day with a morning walk alongside her Golden Retriever, Max. In the afternoons, they enjoy a longer jog together, often ending with a stop at Max's favorite dog park. Max is still fairly young and, aside from a few hundred dollars spent on neutering, hasn't needed any major medical care. But recently, Jessica realized how quickly vet bills could add up due to a situation her friend, Chris, went through.

Chris's dog, Charlie, was diagnosed with cancer, and the treatment estimate came in at nearly $7,000. Unfortunately, without pet insurance, Chris couldn't afford the care. Jessica saw firsthand how distraught Chris was, not being able to get Charlie the help he needed right away. To help, she and some friends organized a GoFundMe, which thankfully raised enough to cover Charlie's treatment.

However, witnessing Chris's situation got Jessica thinking about her own — what would she do if Max needed an expensive treatment? While getting pet insurance would add about $50 or so to her monthly expenses, she felt the peace of mind it provided was more than worth it. Knowing she could focus on Max's recovery in a difficult situation, instead of worrying about how to pay for it, was a top priority.

So, Jessica decided that pet insurance would simply be part of her overall “fur baby” budget, along with food, toys, regular grooming, and an occasional doggy daycare visit.

Hit with a large, unexpected expense

Mark is a retired man who shares his home with Luna, a beautiful five-year-old Persian cat. Luna is the queen of relaxation, perfectly content lounging around with Mark whenever he's home. Since she's an indoor cat and has always been healthy, Mark has never really been able to justify the cost of pet insurance in his mind.

That all changed, however, when Luna started losing weight. Mark noticed she was barely touching her food and took her to the vet. Sadly, he found out she had developed dental disease and the treatment came with an $800 price tag. The cost caught Mark off guard and he found it hard to fit the bill into his budget on such short notice. He found himself having to weigh Luna's well-being against the unexpected expense — a position he never wanted to be in again.

In the end, Mark paid for the treatment but also decided it was time for pet insurance. With Luna getting older, he knew that future vet bills could be even higher and didn't want to be blindsided again. The small monthly premium became more than worth it in his eyes.

Wants the whole family protected

Sarah and Tim, a married couple in their thirties, have two young children and a loveable labrador named Daisy. The couple got Daisy shortly before welcoming their first child, so she's been part of all the children's milestones — first steps, learning to ride bikes, and nightly bedtime stories.

While reviewing their own health insurance plan, Sarah and Tim began to think about Daisy's potential health needs, too. They researched common health issues in labs, from joint problems to allergies, and quickly realized how expensive treatment could be. They both agreed it was best to get Daisy coverage like the rest of the family.

After some research, they found a pet insurance policy to cover Daisy for accidental injuries and illnesses along with routine preventative care. The coverage helped them feel at ease knowing that they'd be able to afford almost any care she needed. Plus, it helped to cut down on Daisy's regular wellness costs.

Weighing the emotional and financial benefits

While pet insurance offers monetary benefits when your pet accidentally gets hurt or develops a new illness, it can also prevent a great deal of emotional turmoil. When you have a strong bond with a pet and he or she suddenly faces a critical health situation, it can be extremely stressful. You worry and want to get your pet care as quickly as possible, but the costs can sometimes be startling or even prohibitive. Pet insurance helps to relieve the additional stress that can come from expensive vet bills. You won't have to worry about being unable to afford care in critical moments and can solely focus on helping your pet recover.

The bottom line: Is pet insurance worth it?

So, what's the final verdict when considering pet insurance vs. no pet insurance? Pet insurance can save pet owners money and reduce stress in many situations. However, whether it's worth it for you will depend on factors like the cost of coverage for your pet, your financial situation, the bond you share with your pet, and your pet's risk level.

If you're still unsure, it can help to think about what you would do if an emergency arose and your pet needed costly care. Could you comfortably cover a large vet bill? And, more importantly, would you want that kind of financial pressure? If not, pet insurance is definitely worth considering. The premiums can be very affordable while the coverage can set your mind at ease.

Interested in learning more? It's easy to find out how much pet insurance coverage costs for your pet. An InsureMe Advisor can help you find the best policy for your pet's unique needs!