When is pet insurance worth it?

Cat wearing medical bandage on injured front paw — The costs of vet visits are rising

(Image credit: Nils Jacobi / Getty Images)

The question of whether pet insurance is worthwhile has become particularly pertinent amid upticks in the cost of veterinarian care. In June, the insurance company Nationwide cited the "rising cost of going to the vet" in its announcement that it "will drop about 100,000 pet insurance policies over the next year," said Forbes.

But while going to the vet is rarely easy on the wallet, pet insurance is not necessarily cheap either. "The average annual cost for an accident and illness policy is about $676 for dogs and $383 for cats, according to NAPHIA data from 2023," said NerdWallet.

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What does pet insurance cover?

"Each pet insurance company is a little different when it comes to what kinds of policies are offered and what is and is not covered," said U.S. News & World Report. That said, there are three general types of pet insurance policies you can get:

Accident and illness plan: The "most common type of pet insurance plan," this option "covers the most problems, like broken bones, toxic ingestion, allergies, cancer and skin infection," as well as "vet expenses like vet visits, surgeries, diagnostic testing and medication," said Forbes.

Accident-only plan: This is a "basic plan" that covers only "expenses related to emergencies — like broken bones, bits, swallowed objects and traumatic dental fractures," said CNBC Select.

Wellness plan: This option is offered as an add-on by some insurers and covers "routine vet expenses like annual wellness exams, vaccinations, microchipping, and flea, tick and heartworm prevention," said Forbes.

Still, "even the most comprehensive of pet policies won't cover everything," said U.S. News & World Report.

For instance, pet insurers generally won't cover things like grooming, boarding, elective procedures, and breeding and pregnancy-related care. Most do not cover pre-existing conditions either, though some "will cover pre-existing conditions that have been cured for a certain amount of time, such as broken bones or respiratory infections," said CNBC Select.

How do the costs of vet care vs. pet insurance compare?

When deciding whether to shell out on a monthly basis for a pet insurance policy or to brace yourself for potentially big vet bills down the line, it is important to understand how the costs compare.

On average, dog owners spend "$472 each year on surgical vet visits and $250 each year on routine vet visits, according to 2022 survey statistics from APPA," said NerdWallet. Meanwhile, cat owners spend an average of "$232 on surgical vet visits and $198 on routine vet visits."

Where vet care costs can really spike is if the unexpected happens, like your pet gets diagnosed with cancer or suffers an injury that requires surgery. "While costs vary based on the conditions and treatments involved," said U.S. News & World Report, "a hospital stay for your pet can commonly cost from $600 to $3,500, while the cost of emergency surgery may range from $1,500 to $5,000."

In comparison, "pet insurance costs an average of $612 per year for dogs and $324 per year for cats," said Forbes, which based these calculations "on a policy with $5,000 in annual coverage with a $250 deductible and 80% reimbursement level."

That said, the actual cost of pet insurance "can vary greatly based on the kind of animal, its breed, size, gender and age — as well as the type of coverage you're getting and where you live." For example, many premiums will go up as your pet gets older and requires more care.

When should you consider buying pet insurance?

It is hard to know for sure whether pet insurance will be worth it, since you cannot predict your pet's health. First, assess your pet's well-being in the here and now, and then think about how you would handle a potential emergency in the future. "If your pet faces only minor health conditions throughout his life, you may end up paying far more for pet insurance than you get back," said NerdWallet. "But if something serious goes wrong, the insurance may be well worth it."

When making the decision, determine how a surprise vet bill would affect you financially.

"If your emergency fund is limited and you're concerned that a large unexpected veterinarian bill could break the bank, monthly premiums could be a lot easier to afford," said CNBC Select. On the other hand, if you feel confident a "big vet bill wouldn't be a financial hardship for you," or "you'd rather take the risk of an expensive diagnosis than pay for insurance you might never use," then pet insurance "may not be worth it," said NerdWallet.

Becca Stanek has worked as an editor and writer in the personal finance space since 2017. She previously served as a deputy editor and later a managing editor overseeing investing and savings content at LendingTree and as an editor at the financial startup SmartAsset, where she focused on retirement- and financial-adviser-related content. Before that, Becca was a staff writer at The Week, primarily contributing to Speed Reads.