Should You Buy A Pet Insurance “Pawlicy”? – When Is Insurance For Your Pet Worth It

My dog, Vira, is staring at me as I type—ears up, eyes wide, eagerly waiting for me to stop working and start walking.

I adopted Vira only a year ago, and yet it’s a little strange to think I managed without her. Consequently, I don’t like to think about the day when she won’t be in my life, and I go to great lengths to ensure that day is as far in the future as possible.

I recently discovered that one of the ways I can protect Vira’s health and wellbeing is through pet insurance companies like Lemonade or other alternative companies like Pawp that can essentially offer you an emergency fund for your pets.

Pet insurance (and a few similar alternatives) are fairly new, however, they’re rapidly gaining traction all across the country. In fact, many employers are incorporating pet insurance into their benefits packages.

Even still, pet insurance is less essential than other forms of insurance, like health and auto, which makes the question of its worth difficult to assess. Take a look at the information below to learn how pet insurance works, what it covers, and whether or not you should consider purchasing a pawlicy.

What is pet insurance?

When your pet suffers from an unexpected illness or injury, your budget could limit your ability to properly care for them.

In fact, according to Healthy Paws Pet Insurance & Foundation, one in four dogs will get cancer at some point in their lifetime, and the average treatment can cost $10,000 or more! As much as it pains me to say it, I could not afford a $10,000 treatment plan if my pup needed it—and I imagine I’m not alone.

Pet insurance can help you save money on anything from stitches to a life-saving surgery for your pet. It protects you from the unplanned expenses that occur when your dog, cat, reptile, bird, or other animal becomes ill or injured, so you can maintain the health of your finances and your pet at the same time.

Read more: How To Pay For An Unexpected Vet Bill

Is pet insurance worth it?

For those of you looking for straightforward “yes” or “no,” I apologize in advance.

The truth is it depends. In 2019, the average annual premium for pet insurance was $585, while the average annual vet bill was just $92. But, according to PetInsuranceQuotes.com:

“every six seconds a pet owner faces a vet bill of $1,000 or more.”

In short, the value of pet insurance comes down to this:

“If you use it, it has value; if you don’t, it doesn’t,” says Kristen Lynch, executive director of North American Pet Health Insurance Association (NAPHIA).

With this in mind, the question you should be asking is whether or not pet insurance makes sense for you and your furry friend.

If your pet is generally healthy, the chance of a hefty vet bill may seem like the lesser of two evils, when compared to the cost of growing insurance premiums. However, if you can afford an additional $30 or $40 monthly payment, perhaps you should consider some policy options for the sake of your own peace of mind.

How does pet insurance work?

In many ways, pet insurance is a lot like health insurance.

If your kid breaks their leg, you take them to the hospital and call your insurance company; the same goes for your pet. Both health insurance and pet insurance also have monthly premiums and deductibles. However, there is one important distinction between the way pet insurance works, as compared to health insurance.

When your kid breaks their leg, the insurance company pays medical fees upfront. You receive a bill later to cover your share of the expenses. However, if your dog does the same, you still have to foot the bill—no pun intended. Instead, your pet insurer will reimburse you for medical bills later, but you bear the initial responsibility of paying for your pet’s health care.

What does pet insurance cover?

What most insurance companies provide is protection for your finances and your pet when surprise costs arise, typically due to an accident or illness.

If your pet suffers a bite wound or a burn, for instance, your insurer can help you afford treatment options such as antibiotics, sutures, and even surgery. Insurance can also help you care for your pet should they ever experience health complications like a urinary tract infection, arthritis, or even life-threatening diseases like kidney failure.

What many insurance policies do not cover, however, is routine care for healthy animals. If you’re taking your cat in for an annual exam, for example, or bringing your dog in for a rabies vaccine, insurers generally expect you will cover those costs on your own.

If you’d like a policy that includes coverage for anticipated procedures and care, search for a company that offers wellness coverage, also called “preventative care” or “routine care,” either included in their policies or as an add-on.

Types of pet insurance

While most policies are highly customizable—tailored to your pet’s breed, age, and more—companies generally offer three main types of coverage: accident-only, accident and illness, and wellness.

Accident-only

Accident-only policies are pretty easy to understand. If your pet ingests a toxic substance, for example, an accident-only policy will usually cover services like X-rays, bloodwork, surgery, and more.

These policies provide the most basic coverage for your pet, and, as a result, are the cheapest.

Accident and illness

This option is, by far, the most popular. In fact, roughly 95% of pet insurance policies are accident and illness plans for dogs, cats, and other animals.

In addition to the situations insured in an accident-only policy, the added illness coverage includes anything from an ear infection to cancer, including costs related to diagnosing conditions.

Lemonade is a great option when it comes to covering any accidents or illnesses your furry friend incurs. When covered events happen, Lemonade provides coverage that can pay for diagnostics like x-rays and labwork, any procedures your pet may need to have, and the medications they may need to take.

You can sign up for Lemonade quickly, and claims can be paid out extremely quickly thanks to Lemonade’s advanced AI. Plus, you can get coverage for your pet starting at just $10/month (plus, add a 10% discount if you insure your home with Lemonade already!).

Wellness

Wellness coverage is available for your pet’s routine, preventative care—such as annual exams and vaccines—and is typically offered as an add-on for your plan.

Embrace Pet Insurance, for example, has an optional preventative care plan called Wellness Rewards, which operates like an allowance. In addition to your accident and illness policy, Embrace’s Wellness Rewards plan reimburses you for routine veterinary, training, and grooming costs—including microchipping, spay/neuter surgery, and even prescription diet food.

Pumpkin Pet Insurance has a similar option, and preventative care is a central part of their pet care philosophy. They emphasize the importance of preventing and diagnosing issues quickly. That’s why their optional preventive plan, Pumpkin Preventive Essentials, includes an annual wellness exam, vaccines, and key lab tests to detect diseases, all at 100% reimbursement.

Extras

In addition to the options listed above, many companies provide added benefits, which may or may not be included in the insurers’ regular accident and illness plans (some present these benefits as added coverage options instead).

With Embrace, for instance, all policies include treatments for alternative therapies, such as chiropractic care and acupuncture; behavioral conditions; and even prosthetics and mobility devices—which is not typically covered by pet insurance companies. Embrace also offers competitive coverage for dental illnesses, up to $1,000 a year!

If, however, the various types of insurance and added benefits are overwhelming to you, consider insurers like Lemonade and Pumpkin.

Exclusions

As you research, keep in mind that some circumstances and conditions are not often eligible for coverage.

For instance, many companies do not provide coverage for certain breed-specific illnesses or cosmetic procedures, such as dewclaw removal. In addition, no company will cover pre-existing conditions; however, Embrace’s dog insurance plan differentiates between curable and incurable pre-existing conditions, so pet owners can still receive some assistance.

Additionally, many companies will not provide coverage for pets over a certain age. Pumpkin, on the other hand, does not have an upper age limit and offers policies for any dog or cat over eight weeks.

Cost of pet insurance

The average cost of pet insurance is roughly $45 per month for dogs and $25 for cats. However, the amount you pay depends on your pet’s age and breed, where you live, as well as the amount of coverage you’d like.

As you evaluate coverage options and costs, be sure to research the premium, deductible, reimbursement percentage, and coverage limits. Your premium is what’s listed above—roughly $45 for dogs, and $25 for cats—and it’s the price you pay per month to ensure your pet’s care.

Lemonade is offering competitive pricing: for as little as $10 and around $30, Lemonade’s coverage includes all types of preventative care, multiple checkups, as well as therapy.

Pet insurance deductibles

Remember that with pet insurance, there also may be a deductible –  the amount you’ll pay before your insurer begins covering costs. At Lemonade, deductibles are $100, $250, or $500.

Embrace has deductibles ranging from $200 to $1,000, but also offers a diminishing Healthy Pet Deductible, which cuts $50 off your deductible every year you do not receive a claim reimbursement. Pumpkin’s annual deductible options fall between $100 and $500. 

The reimbursement percentage is the amount your insurer will cover after you’ve paid your deductible. Many pet insurance companies provide a range of rates for their policies, like 70-90% with Lemonade and Embrace; Pumpkin’s plan offers a competitive reimbursement rate for dogs and cats.

Pet insurance coverage limits

Finally, the coverage limit is the maximum amount your insurer will provide for medical expenses. With Lemonade, you’re able to select an annual limit between $5,000 and $100,000 which is a wide upper range. Embrace can have coverage limits as low as $5,000, or all the way up to $30,000, depending on the policy you choose. Pumpkin’s plan offers annual limits of $10,000 or $20,000 for dogs, and $7,000 or $15,000 for cats. 

Beyond these factors, there are plenty of other ways to keep pet insurance costs low. For instance, many pet insurance policies have rising premiums as pets age, so be sure to insure your pet while they’re still young and healthy.

Additionally, you can save money by paying your premium on an annual basis instead of monthly. Many insurance companies will also offer discounts for pet owners in the military or those with multiple pets.

Read more: The Annual Cost Of Pet Ownership: Can You Afford A Furry Friend?

Should you purchase pet insurance?

While you can’t see the future, there are characteristics that make some pets more susceptible to specific conditions and issues, which makes pet insurance much more valuable.

For instance, purebreds are more likely to develop certain hereditary conditions. Likewise, older animals have a higher chance of health complications, which could require more vet visits to keep them happy and healthy. At the same time, as mentioned above, some pets have pre-existing conditions that are not covered by insurance, making the investment less beneficial.

Put simply, pet insurance isn’t for everyone. If you’ve already established a healthy vet emergency fund, a policy may not be worth the price of rising premiums. But, if you’re concerned about the threat of “economic euthanasia,” a pet insurance plan can offer tremendous value and peace of mind.

Evaluate your pet’s unique breed and needs, as well as your own ability to take on unexpected expenses, to determine if pet insurance is right for you. 

How to choose a pet insurance policy

To pick your policy, first determine what kind of coverage you’d like for your pet, and then compare options.

If you’re concerned about cost, compare accident-only policies, and avoid added benefits. Some research reveals preventative care add-ons to be a poor investment for your pet, so you can also easily cut costs by skipping wellness coverage.

To help you sift through options, Lemonade, Pumpkin, and Embrace provide clear policy comparisons next to other popular pet insurance companies. 

Finally, before you purchase a policy, be sure to understand fully what is and is not covered by your insurer—including circumstances and conditions, as well as the amount of your pet’s medical expenses. Also, many premiums increase as your pet ages, so make sure you’re aware of those price hikes before you buy.

Alternatives to pet insurance

Whether or not pet insurance is worth the investment is a personal decision that only you can make. Nevertheless, there are alternatives to insurance that can help you save money on pet care.

Have an emergency fund

Saving up for life’s unexpected events is a must in general, but consider having one specifically for your pets. Pawp should be the go-to company if you’re having a problem starting an emergency fund. For $24/month you’ll get access to unlimited telehealth visits, plus a $3,000  emergency fund.

Shop for affordable care

Instead of shopping for insurance policies that cover steep vet bills, request quotes from multiple clinics to find the lowest price for the service you need. You can also search for local veterinary schools, which may run low-cost clinics for residents with limited income. Or, get free advice from a vet online, using sites like Ask.VetBabble.

Pay as you go

Another alternative is to spread out the cost of your vet expenses. Some veterinarians offer payment plans to help those who can’t afford sudden, substantial bills. Additionally, sites like CareCredit and Scratchpay provide similar financing options for pet owners in need of creative solutions.

Find free funding

Finally, you could consider seeking free support. Crowdfunding sites like Waggle and GoFundMe can help owners raise money for their pet’s care. There are also some incredible nonprofits and foundations, like the Foundation for Animal Care and Education (FACE) and Help-a-Pet, that offer financial assistance for pet owners in need.

Summary

At the end of the day, whether or not pet insurance is worth the price depends on who’s asking.

Could you afford an additional $30 or $40 insurance payment each month? Or, do you already have a substantial vet emergency fund? Does your pet have health issues? Or, have you invested in routine, preventative care to keep them healthy?

If you want to consider purchasing a policy, think about your pet’s breed and needs, as well as your own tolerance for risk. Evaluate the cost today and how it might change as your pet ages. Make sure you compare quotes and coverage options from companies like Lemonade, Pumpkin, and Embrace and contact insurers to find the policy that best meets your needs, and your pet’s.

As challenging as it may be to think about your pet becoming sick or getting injured, the best way to prepare yourself for unexpected expenses is to expect them. Whether you choose to anticipate those costs via budgeting or an insurance policy is secondary; remember that the ultimate goal is to protect yourself, to protect your pet, and to make sure the two of you can be together as long as pawsible.

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Pumpkin Advertiser Disclosure: Pumpkin Pet Insurance policies do not cover pre-existing conditions. Waiting periods, annual deductible, co-insurance, benefit limits and exclusions may apply. For full terms, visit pumpkin.care/insurancepolicy. Products, discounts, and rates may vary and are subject to change. Pumpkin Insurance Services Inc. (“Pumpkin”) (NPN #19084749) is a licensed insurance agency, not an insurer. Insurance is underwritten by United States Fire Insurance Company (NAIC #21113, Morristown, NJ), a Crum & Forster Company and produced by Pumpkin. Pumpkin Preventive Essentials is not an insurance policy. It is offered as an optional add-on non-insurance benefit. Pumpkin is responsible for the product and administration. Pumpkin Preventive Essentials is not available in all states. For full terms, visit pumpkin.care/customeragreement.