Is Pet Insurance Worth the Cost? – consumerreports.org

Ad-free. Influence-free. Powered by consumers.
Get involved
Issues we work on
The payment for your account couldn’t be processed or you’ve canceled your account with us.
Sign In
We don’t recognize that sign in.
Your username maybe be your email address. Passwords are 6-20 characters with at least one number and letter.
We still don’t recognize that sign in.
Retrieve your username.
Reset your password.
*Required
*Required
Forgot your username or password?
Don’t have an account?
My account

Save products you love, products you own and much more!
Other Membership Benefits:
Suggested Searches
Cars
Car Ratings & Reviews
CARS
Car Reliability Guide
Car Buying & Pricing
BUYING A CAR
Most Discounted Cars Right Now
Car Maintenance & Repair
CAR MAINTENANCE
The Cost of Car Ownership Over Time
Key Topics & News
CAR NEWS
Listen to the Talking Cars Podcast
Home & Garden
Bed & Bath
GUIDE TO BETTER SLEEP
How to Get a Great Night’s Sleep
Lawn & Garden
TOP PICKS FROM CR
Best and Worst Snow Blowers
Home Improvement
SAVING MONEY
Cut Home Heating Costs
Home Safety & Security
HOME SAFETY
Best DIY Home Security Systems of 2023
Appliances
Kitchen
REPAIR OR REPLACE?
What to Do With a Broken Appliance
Small Appliances
TOP PICKS FROM CR
Best Cooking & Cleanup Products
Laundry & Cleaning
Top Picks From CR
Best Laundry Gear & Vacuums
Heating, Cooling & Air
HUMIDIFIERS
Find the Right-Sized Humidifier
Electronics
Home Entertainment
FIND YOUR NEW TV
Best TVs of 2023
Home Office
GET BETTER WIFI NOW
Best and Worst Home Internet Providers
Smartphones & Wearables
BEST SMARTPHONES
Find the Right Phone for You
Digital Security & Privacy
MEMBER BENEFIT
CR Security Planner
More
Take Action
Like medical coverage for people, pet insurance policies are complicated. Here’s what we found when we analyzed the coverage from three health insurers.
Two years ago, Elizabeth Newsom-Stewart’s cat Fawkes ate part of a lily plant leaf. Newsom-Stewart, then a veterinary student at Cornell University, immediately knew the danger he was in, and rushed him to an animal hospital.
“Some lily plants are toxic to cats” she says, and may cause kidney failure. “Symptoms can take 12 to 24 hours to show. By the time kidney failure occurs, it’s almost always fatal.”
Emergency treatment, which included three days in intensive care, medication, tests, and lots of IV fluids, cost $1,783. But just three months before, Newsom-Stewart bought pet insurance, and it covered $1,327 of the bill. And Fawkes, now 4, made a full recovery.
A serious illness or injury can take a financial toll, even when the patient is a pet. Cancer treatments can easily run $5,000; surgery to fix a torn ACL from, say, a poorly executed jump off the sofa can cost about $3,300. Pet insurance is sold with the promise that by helping to cover some of your pet’s medical bills, you won’t be forced to consider “economic euthanasia” in the most dire circumstances.
But as helpful and emotionally comforting as it might be, is insurance really worth the price?
About 1.4 million pets in the U.S. and Canada were covered by a plan at the end of 2014, according to the North American Pet Health Insurance Association, a trade group. That’s less than 1 percent of about 174 million pet cats and dogs, but up from 680,000 policies in 2008. Some of the increase may be linked to a surprising fact: Pet insurance is one of the fastest-growing optional employee benefits.
Major policy providers include the ASPCA (through Hartville), Embrace, Healthy Paws, PetFirst, Petplan, and Trupanion. Most cover only cats and dogs, but one company, Nationwide (formerly Veterinary Pet Insurance), also insures birds, rabbits, snakes, turtles, and other animals.

If you’ve got a pet, you’ve probably got pet fur or hair all over your home. Find the best vacuum to deal with the mess.

Like people insurance, pet policies come with a variety of deductibles, co-payments, and premiums. Unlike people coverage, you usually have to pay the vet bills in full and wait for reimbursement. But Trupanion launched a service in February that can disburse payments directly to vets on the day of service. The company says about 60 percent of its bills are already processed that way.
The cost of coverage can increase depending on your pet’s breed (purebreds cost more to insure because they’re more prone to some hereditary conditions), age (plans may cost more as your pet gets older), the rising cost of veterinary care, and the coverage options you choose, such as your deductible amount. Embrace and Healthy Paws pay a flat percentage of covered costs after your deductible is met. Other companies calculate reimbursements based on the “usual and customary costs” of vet care in your area. Embrace lets you pick the annual maximum amount it will cover each year ($5,000, $8,000, $10,000, or $15,000); Healthy Paws and Trupanion have no annual ceiling.
Almost all policies exclude pre-existing conditions and may exclude breed-specific conditions (or charge you more to cover them).
You can pick a plan that insures costs due to accidents (such as injuries caused by motor vehicles), or accidents and illness (including arthritis, cancer, and colitis). Some providers also offer wellness coverage for certain routine care, like annual exams, flea and tick treatments, and vaccinations. Eighty-one percent of pet insurance policies are accident and illness plans for dogs; 14.6 percent provide the same kind of coverage for cats and other pets. Only about 4 percent of the market is made up of accident-only and wellness coverage.
The insurance trade group says that accident and illness coverage per year averaged $473 for dogs and $285 for cats in 2014. Accident-only policies ran $158 and $132, respectively.
To compare costs, we asked four providers—Embrace, Healthy Paws, Nationwide, and Trupanion—whose parent companies comprise roughly 75 percent of the market, to estimate what their accident and illness policies would cover for a specific dog and cat. After initially agreeing, Nationwide decided it would only provide data for its policy that had accident, illness, and wellness coverage, so we didn’t include the company in our analysis.
We used the vet bills of Guinness, an almost 12-year-old Labrador mix from Westchester County, N.Y., and Freddie, a mixed-breed cat from Fairfield County, Conn., who’s almost 9.
Guinness had few health problems over the years until he was diagnosed with skin cancer last fall. Treating him required two costly surgeries and expensive follow-up care.
Freddie has been relatively healthy; he had one pricey dental cleaning under anesthesia, and has been prescribed cat food and medication to treat infections. We did our analysis assuming that their owners had signed them up for coverage when they were just a few weeks old, and we adjusted each medical-care charge into present-day dollars to judge how their expenses would have been covered.
For Freddie, only the Healthy Paws policy would have paid out more than it cost, in part because of its lower premiums.
If you have a pet like Guinness with a costly condition or illness you want to treat, we found that pet insurance may pay out more than it costs you. In our exercise, a Healthy Paws plan was the only one that paid more than it cost.
But if his owner continues to cover cancer treatments, all three plans may be worth it. In 2015, for example, Healthy Paws and Trupanion would have reimbursed the owner over $3,000 more than they would have charged for coverage. Embrace would have covered more than $4,000 over the cost of its plan.
Of course, our results are for a single cat and dog; vet bills are different for every animal, and there’s no way to predict whether your pet will become sick or injured. But if you’d like help with unexpected, large vet bills, a plan may be worth considering.
Talk with your vet about the medical costs your pet’s breed will usually incur, and ask about his experience with different pet insurers.
Download sample policies from insurance websites and read them thoroughly for limitations, exceptions, and co-payments. Consider skipping wellness coverage if possible and paying for it out of pocket. Last year routine vet care cost cat owners just $196 and dog owners only $235, according to the American Pet Products Association.
If you don’t want to pay for pet insurance, consider starting an emergency savings fund for pet care instead. If you find you need help with a big pet medical bill, the Humane Society has a list of organizations that may help pay for it.
Take steps to keep your pet healthy to trim medical costs.
How much, if anything, would the owners of Guinness the Dog and Freddie the Cat have saved over the years on their healthcare if they had had pet insurance?
How We Crunched the Numbers
To compare policies, we converted all of the vet charges over the years into 2016 dollars, and checked current premiums for our pets at different ages. We chose a 10 percent co-pay for all three policies, which means the plans cover 90 percent of eligible charges. Embrace has a $200 annual deductible; for Healthy Paws, it’s $250. Trupanion has a $200 deductible per type of illness or accident. Once that deductible is met (say, for a cancer treatment), it covers 90 percent of additional charges for that condition. Healthy Paws and Trupanion have unlimited annual reimbursements; Embrace lets you choose an annual ceiling of $5,000, $8,000, $10,000, or $15,000. In only one year did bills for Guinness go over the $5,000 annual ceiling we used in our example. Note that the premiums of an Embrace plan go up significantly if you choose higher annual ceilings.
Editor’s Note: This article also appeared in the May 2016 issue of Consumer Reports magazine.
On the ‘Consumer 101′ TV show, Consumer Reports’ expert Octavio Blanco offers tips on deciding when insurance is needed and how to get the most bang for the buck when it comes to coverage.
We respect your privacy. All email addresses you provide will be used just for sending this story.

source