Should you get pet insurance?

December 15, 2022 | Robbie Morris

Robbie Morris, CSLP®
Robbie Morris, CSLP®
Hey! I'm Robbie, the founder of Roots Financial Planning, a fee-only, fiduciary advisor located in San Antonio, TX working virtually with dentists across the United States. When I'm not helping dentists live their best life, you can find me making pizza, swimming, or skiing.

Pet insurance, like all other insurance, is used to protect you financially from a low probability event. In this case, that would be your pet getting injured or sick.

When you have insurance in place, it allows you to make a decision based on the health and wellness of your animal rather than on the cost of treatment.

How does pet insurance work?

Pet insurance protects you against unexpected vet bills when your pet is injured or becomes sick. Generally, this includes anything above and beyond routine checkup visits to the vet.

There is no in or out of network veterinarians for pet insurance like you often see with human health insurance. Any vet where you can have qualifying services performed will be covered. This is because the pet insurance company reimburses you directly rather than paying the veterinarian’s office. You pay the vet for services performed, then you submit proof of expenses paid to the insurance company for reimbursement.

All pet insurance policies have a waiting period before benefits can be received. This waiting period is only on the front end of the policy from date of inception until the time has elapsed. For example, a policy might have a 7-day waiting period for accident-related injuries. This means for the first 7 days of policy ownership you will be unable to submit a claim for an accident-related injury. There will be different waiting periods for the many kinds of claims a pet can expect. Eventually, all waiting periods will be in the past and you will not have to worry about this feature.

Before deciding on a policy, be sure you understand the process for submitting a claim and how long it takes to process your reimbursement. You don’t want to run into any surprises along the way.

How much does pet insurance cost?

There are many providers for pet insurance. There are even a few websites that will aggregate quotes for you. On average pet insurance will be an investment of $47 per month for dogs and $29 per month for cats. The price will vary depending on age, health, breed, location, and policy options you choose. Like humans, an older animal will cost more to insure because they are more likely to develop age related illnesses. One thing of note is that pet insurance will increase in price incrementally over time. You aren’t able to lock in a low price at a young age like you can with human life insurance.

When you select your policy, you will often have several options available for reimbursement percentage. These usually range from 70% to 100%. The higher the percentage, the more expensive the policy will be. This percentage indicates the amount the insurance company will reimburse you for a claim after you meet your deductible. For example: your deductible is $500, your reimbursement percentage is 80%, and you have an eligible vet bill of $2,000. After you meet your deductible, $1,500 is left. 80% of $1,500, or $1,200 will be covered by the insurance company.

Pet insurance will also have payout limits. Either an “annual limit” or a “per incident” limit. This limit puts a cap on how much reimbursement can be provided by the insurance company during the allotted timeframe. A policy without a limit will have the most expensive premiums.

Insurance providers will often have multi-pet discounts to help ease the cost.

What does pet insurance pay for?

There are generally three tiers of pet insurance: accident only, accident + illness, and accident + illness and wellness.

Accident covers things like broken bones, bites from other animals, and swallowing foreign objects.

Illness covers costs related to sickness that develop overtime whether temporary or ongoing.

Wellness is a less common add-on that covers routine vet visits and vaccines unrelated to emergencies.

Exclusions for pre-existing conditions are always in place. The insurance company will require a recent check up to determine the current health of your pet. If you do intend to purchase pet insurance, it can be prudent to do so at a younger age before any conditions arise.

What are my funding alternatives without insurance?

Not everyone has the need for pet insurance. If you are comfortable covering unexpected vet bills from your emergency fund or monthly cash flow, you may not find a need for another insurance policy.

Other alternatives include vet office financing and CareCredit. Both of these can be used to set up a more affordable payment plan so you don’t have to cover the bill all at once.


Pet insurance might be a good idea if you don’t have the savings to cover a large unexpected bill and want peace of mind. If your pet is younger and healthy it makes more sense to get insurance. It will prevent you from needing to have a difficult discussion with the vet if you are unable to afford treatment.

Pet insurance might not be for you if you have no problem covering large unexpected bills. You’re ok with taking the risk of an expensive procedure, rather than paying for insurance you may never need. When your pet is older and has other pre-existing conditions, it makes less sense to acquire insurance at that time.