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The costs of pet ownership can add up quickly. If you own a dog or cat, their health and wellness expenses can run up a tab of $1,100 to $1,400 or more a year. Beyond those basic costs, unexpected vet bills can spiral out of control. 

One way to cover those costs is with a pet insurance plan. Here’s what a standard policy covers and how to decide whether it’s worth the monthly fee. 

What is pet insurance?

Pet insurance is a financial agreement between a pet owner and an insurance company. You’ll make monthly premium payments and the insurance company will pay for certain vet bills. In a standard pet insurance policy, routine checkups and preventative care aren’t covered. 

Depending on the policy, you may need to pay a deductible and/or a copay before the insurance kicks in. Plus, there are often policy limits on how much the insurance company will pay overall.

Typically, you’ll be expected to pay for the vet bill upfront and send a copy of the bill to the insurance company for reimbursement. Some policies offer full reimbursement of covered medical costs, while others cover a percentage of the bill or a specific dollar amount for certain conditions or procedures. Most impose an annual or lifetime limit.

How much does pet insurance cost?

Like other types of insurance, companies determine pet insurance premiums based on the unique risk factors associated with your pet. On average, dog owners tend to pay more than cat owners. And broader coverage leads to a more expensive policy.

“Pet insurance is a lot like human health insurance in that different policies are going to cover different things based on cost, presumed risks, pre-existing conditions, et cetera,” says Gary Richter, a veterinary health expert with Rover, a platform that helps people find pet sitters and dog walkers.

Here’s a look at the 2021 average monthly costs of pet insurance, according to the North American Pet Health Insurance Association. 

The cost of common pet care procedures

The cost of pet care varies widely based on where you live and the veterinary costs in your area. Here are some cost estimates for common vet bills you may encounter:

Of course, the expenses you run into will vary based on your pet. But there’s a chance you could encounter more than one of these big expenses over your pet’s lifetime.

Is pet insurance worth it?

Whether or not pet insurance is worth it depends on your individual situation. Here are a few reasons to buy a policy and a few reasons to skip it.

“Pet insurance can be worth it, but it often is not,” says Jay Zigmont, a CFP® professional and founder of Childfree Wealth. “To qualify for pet insurance, your pet must be healthy (and usually very young). If your vet has already identified an issue, chances are the insurance will not cover it.”

Before you buy pet insurance, take a close look at your financial situation. If you have a robust emergency fund, you could tap into those funds to cover pet related emergencies. But if you don’t have a safety net, the financial peace of mind provided by pet insurance can be life changing during a vet visit. 

“No one should have to make life or death decisions based on cost,” Richter says. “I often tell pet owners that insurance is the one gamble in life you hope to lose. If a family member (human or animal) has a major medical issue however, there is no greater feeling than knowing you are covered.”

If you decide that pet insurance is right for you, it’s important to move quickly. Since most insurance companies won’t cover pre-existing conditions, it’s best to buy a policy while your furry friend is still young and healthy.

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