Is Pet Insurance Worth It?

You’ll experience a lot of surprises as a pet parent. From those goofy naptime grins to wet-nosed nuzzles, the little joys of having a furbaby are marked by unexpected, memorable moments.

But there’s a trade-off.

Preventative care and emergency vet bills add up, and even the most well-intentioned pet parent can feel overwhelmed by the expense. With pet insurance, you can worry a little less about the costs of veterinary care and focus on those moments that matter most.

How does pet insurance work?

Unlike human health insurance, pet insurance is meant to reimburse you for costs rather than cover them upfront.

In other words, when you take your cat or dog to the vet, you pay the bill at the time of service and then submit a claim to the pet insurance carrier. If approved, you’ll receive a check for the portion covered by your pet insurance agreement.

Every policy has an annual deductible you must meet before certain pet insurance benefits kick in — just like your own health insurance. For example, your dog’s policy may only reimburse you for a small portion of a vet appointment. Once you meet the deductible, however, you could be reimbursed for a larger percentage of an emergency surgical procedure.

Pet insurance typically reimburses you for 50% to 100% of your vet bill. How much it covers depends on the policy. In general, the more you pay for your policy, the greater the coverage — but does a higher pet insurance cost justify the potential savings?

Let’s explore what pet insurance does and does not cover.

What does pet insurance cover?

The best pet insurance covers all types of veterinary care, from preventative check-ups to emergency procedures. But, of course, it all depends on what you’re willing to pay.

A standard pet insurance policy covers non-preexisting illnesses, injuries, and accidents to protect you financially in an emergency. However, regular check-ups, medications, vaccines, and preventative care are not typically included in a basic policy because those are anticipated costs you can budget. Still, you can usually add wellness coverage to beef up a basic policy and include visits related to preventative care.

Although pet policies vary, most insurers offer three types of coverage.

Accident-only coverage

Accident-only (AO) coverage is limited but serves as a safety net in the event of an emergency. This type of policy typically covers:

• Physical injuries such as broken bones and ligament tears
• Toxin ingestion
• Swallowed object removal
• Snake bites
• Imaging procedures
• Surgery
• Hospitalization

Accident and illness coverage

An accident and illness (A&I) policy builds upon AO coverage by adding coverage for:

• Prescription medications
• Chronic illnesses
• Cancer treatments

Most pet insurers stipulate that the illness must not be preexisting when you purchased the policy, otherwise it won’t be covered. That’s why buying a pet insurance policy is more affordable when your pet is still young and healthy.

Wellness coverage

Pet wellness coverage tends to be offered as a rider you can add to an A&I policy. These policies include everything in your A&I insurance, plus coverage for:

• Annual check-ups
• Vaccinations
• Dental care
• Nutrition consultations
• Early screening diagnostics

When choosing the best pet insurance policy for your pet, consider the annual deductible amounts, annual coverage limit, and reimbursement percentage in addition to the monthly cost. You might find that a basic policy meant to cover emergency expenses makes more financial sense for your budget than one that includes preventative care.

What does pet insurance not cover?

Pet insurance does not cover preexisting conditions. A preexisting condition is any illness or injury your pet develops before your pet insurance policy goes into full effect.

Most pet insurance carriers have waiting periods between when you purchase the policy and when your pet is fully covered. This waiting period can range anywhere from a couple of weeks to a few months. If your pet develops a condition during this waiting period, that condition is typically not covered.

But policies vary, so read the details carefully before buying so you know exactly what your pet insurance will and will not cover.

How much does pet insurance cost?

All of this sounds great, but is pet insurance affordable?

Pet insurance costs vary by provider and coverage level. Although you can customize your policy to suit your pet’s needs, expect to pay at least $20 to $50 per month.

The great thing about pet insurance is that there’s a plan to fit every household budget. When shopping around, compare quotes from top pet insurance providers and see if they offer discounts for insuring multiple pets.

Is pet insurance worth it?

Pet insurance for dogs and cats can provide financial peace of mind, which is something you can’t put a price on. But whether an individual policy is worth the expense depends on your needs and budget.

A standard accident-only policy is an adequate safety net for most pet parents because it reimburses unexpected, big-ticket vet visits. But suppose you’ve always had trouble setting aside money for an emergency fund. In that case, you may find that a customized pet insurance plan makes a lot of sense.

Alternatives to buying pet insurance

What if you can’t afford pet insurance or the coverage options seem lacking? Some alternatives to purchasing a policy may better suit your budget.

Build an emergency savings fund

The simplest option is to set aside the money you would have spent on pet insurance in a dedicated emergency fund. For example, instead of paying $50 per month on pet insurance, you could save that amount and have $600 in your vet fund after one year. You can then boost your emergency fund with any extra cash you can spare throughout the year, such as the money you receive from filing taxes.

But this option has a drawback. Routine vet care, including wellness visits and vaccinations, already costs the average pet owner several hundred dollars annually. So, even if your dog or cat is healthy, you’ll still wipe out that emergency fund every year. Plus, if you’re not disciplined enough to reserve that savings account for pet care alone, you could end up in a financial bind after one unexpected vet visit.

Open a personal line of credit

Using a line of credit to cover vet expenses can be a smart move. With a line of credit, you can draw up to an approved amount whenever you need it. Best of all, you only pay interest on the amount you borrow.

Think of a line of credit as a flexible loan that gives you an extra cash flow cushion. You can use the funds you borrow for whatever you need. Still, you might opt to only use your line of credit for pet care, drawing the money to pay vet bills, repaying it, and repeating the process.

Lines of credit work similarly to credit cards but offer some extra advantages. For instance, you’re less likely to make impulse purchases because the funds aren’t linked to a credit card, which makes it easier to reserve the money for emergency expenses. Plus, whereas a credit card company reviews your credit history during the application process, you can get a line of credit with bad credit. You simply need to provide the required documentation and meet the lender’s income requirements.

Take out an installment loan

Let’s suppose you don’t have the best pet insurance and haven’t built up an emergency savings account. In that case, the right loan can cover those unexpected costs.

Since installment loans offer higher loan amounts and are repaid over multiple fixed payments, they’re great options for covering emergency vet expenses. You can also get approved for an installment loan and access the funds by the next business day, if not sooner. That’s a significant advantage when your pet needs immediate care.

Advance America can help you cover unexpected vet bills

When it comes to financial matters, it’s always best to plan for contingencies. Pet insurance is one of those smart investments worth considering if it fits within your budget.

If emergency vet bills catch you by surprise, trust that Advance America can help you get the money you need. From cash advances and lines of credit to installment and title loans, we offer a range of financial products to suit every situation.