Is Pet Insurance Worth the Cost?
Most people are motivated to buy pet insurance out of a combination of love and fear.
Family member
Pet parents these days often think of their animals as children and treat them like family. We want them to be healthy and happy. But do we need pet insurance to do that?
The promise
Insurance companies sell pet policies with the promise that they'll be there to help cover your pet's medical bills. You won't be forced to consider putting your pet down because you can't afford the treatment.
♦ Pet insurance is now a $5.7 billion business in the U.S., and growing.
Most plans cover cats and dogs. One company (Nationwide) also insures birds, rabbits, snakes, turtles and other more exotic pets.
A few cover horses, but these can get quite complicated. The coverage you can get may depend on the horse's age, breed and other criteria. Some even require a form of horse life insurance.
♦ Very few people pay close attention to policy details. And almost no one considers the total cost over their pet's lifetime.
♦ If your pet is healthy, many pet policies aren't worth what you pay over the years. You'll seldom get back more in reimbursements than you pay in premiums.
• Pet insurance isn't bad. It does provide peace of mind. And it's possible to come out ahead if your pet has an expensive health condition or an accident.
♦ Pet insurance is one of those "buyer beware" things. Policies can be vague, and claims processing can get quite painful.
What does it cost, and what does it pay?
Details vary by insurer and policy, but pet insurance premiums are usually based on things like the cost of vet care where you live and your pet's age and breed.
Pet insurance won't save you from a big vet bill at checkout. Even with insurance, you usually pay the vet first, then submit a claim and hope for reimbursement.
The Pet Health Insurance Association lists the most common claims and typical costs:
• The most common accidents are broken legs or torn knee ligaments, which run around $1,500.
• The most common mistake is swallowing something, with estimates close to $2,000 to remove it.
• The least common but very serious illness is cancer, with treatment easily reaching $5,000.
♦ In 2025, the average "accident and illness" policy cost $836 a year for dogs and $435 for cats. Those prices jumped more than 10% in just one year.
For many healthy pets, a year's worth of routine vet bills can come in under a typical $500 deductible.
• In 2024, pet insurers collected $4.74 billion in premiums in the U.S. and paid out about $3.07 billion in claims. That's roughly 65 cents back for every dollar pet owners paid in. The rest goes to overhead, marketing and profit.
Stomach trouble is one of the most common reasons pets end up at the vet. And vet bills keep climbing. According to the U.S. Bureau of Labor Statistics, vet prices jumped 7.1% in 2025, more than twice as fast as prices overall. A vet bill that cost $20 ten years ago costs about $33.50 today.
♦ Spot Pet Insurance says its average claim in 2025 was $456, up from $439 the year before. Keep in mind Spot sells pet insurance. They have every reason to make vet bills look as big as possible, so take their numbers with a grain of salt.
♦ Limited value is hardly unique to pet insurance. After all, most people pay a lifetime of premiums on their homeowners and car policies, yet rarely make a claim.
• Pet insurance is more likely to pay off when your furry friend has a major accident or serious illness.
Few pets have insurance
In 2025, 95 million U.S. households owned at least one pet. Dogs and cats lead the way, but plenty of families also keep fish, birds and small animals.
• About 7.6 million pets in North America are now insured, most of them in the U.S. The number has been growing about 20% a year.
♦ Even so, only about 4% of American pets have insurance.
Dogs make up roughly 80% of insured pets, and cats about 20%.
The growth is driven in part by rising vet costs. But a big driver is employers. A growing number of companies now offer pet insurance as an employee benefit.
Talk with your vet
If you're considering pet insurance, ask your vet what they think your pet's breed will usually need in medical costs over its lifetime. Ask if they've had any experience with pet insurers.
This industry isn't like insurance for people, where the doctor submits claims and the patient waits for them to be processed.
♦ Pet parents have to submit the paperwork to get a claim processed. A large claim will get the vet involved, because they'll be asked to provide proof of medical history. Ask your vet if any particular pet insurer was easy or difficult to deal with.
→ There's a slow move toward electronic claims. Trupanion has some vets on board, but for the most part pet parents have to do the filing.
Ask a friend or neighbor
People love to talk about their pets.
Forget networking sites like Facebook and Nextdoor. They've fallen into the same trap as pretty much all online review sites.
• Every pet insurer will have some glowing reviews. They tend to pile up on sites that have links directing you to buy.
• Complaining reviews come in three types: true, disgruntled and fake.
Pet insurance is one of those industries that can still stretch things a bit, so it's natural to find a few bad apples.
♦ The industry likes to call itself health insurance for pets. It sells.
But unlike health insurance for people, pet insurance is actually a form of property and casualty insurance, because pets are considered property.
Pet insurance is regulated by each state's Department of Insurance. Since 2022, many states have adopted new rules that make insurers spell out things like pre-existing conditions and waiting periods in plain language.
Watch out for "wellness plans" sold by vet clinics. They're often not insurance at all, and they're not regulated like insurance.
Most insurers aren't upfront about future rate increases, which leads to a lot of negative talk.
♦ Even if you stick with your insurer, they may not stick with you. Rates often climb as your pet ages, and some insurers have pulled out of markets or stopped renewing policies.
In 2024, Nationwide, the oldest pet insurer in the country, announced it would drop about 100,000 pet policies, blaming rising vet costs. Owners of older pets with health problems were hit hardest, since a new insurer won't cover pre-existing conditions.
♦ All of them will put up a tough fight before paying an expensive claim. A pre-existing condition is the number one reason for denial. Expect the claims examiner to go over your pet's health history with a fine-tooth comb.
This behavior drives many of the negative reviews people leave and is a common Better Business Bureau complaint. It tends to hit older pets hardest, since they have a longer history.
• Disgruntled folks are often people who missed some minor rule when submitting a claim, so it was denied. The insurer expects them to give up.
♦ Never forget, insurance companies make more profit when they don't pay out. Expect that you may have to work at getting a claim paid.
