Is Pet Insurance a Smart Investment?
As pet ownership continues to rise, so does the demand for pet insurance. But with premiums that can rival human health insurance, is it truly worth the cost? Marketplace delved into the world of pet insurance to assess its value for pet owners.
How Pet Insurance Works
Pet insurance operates similarly to human health insurance. Owners select a policy and pay a monthly premium. When a pet requires veterinary care, owners pay the bill upfront and then submit a claim to the insurance company for reimbursement, according to Emily Stewart, senior correspondent at Business Insider.
Older pets tend to have higher insurance premiums, according to Emily Stewart at Business Insider.
The Popularity and Cost of Pet Insurance
While pet insurance enrollment is growing, it still represents a small fraction of total pet ownership. In 2023, approximately 6 million pets in the U.S. were insured, compared to 80 million dogs and 60 million cats. Despite this, Americans spent an estimated $4 billion on pet insurance premiums in 2023, a significant portion of the $147 billion spent overall on pets.
The cost of pet insurance varies significantly depending on the pet’s age, breed, and existing health conditions. As Stewart explained, premiums start low for young, healthy pets but can increase dramatically with age and the onset of health problems. For example, a young puppy might have a monthly premium of $25, while an older dog with health issues could cost $150 to $300 per month.
The Fine Print and Preexisting Conditions
One of the primary concerns with pet insurance is that it generally does not cover preexisting conditions. This means that any health problems a pet has prior to enrollment are typically excluded from coverage. As a result, owners may find themselves paying for treatments that are consistently denied coverage because they are related to a prior condition.
Stewart emphasizes the importance of reading the fine print of insurance policies to understand the limitations and exclusions.
The Verdict
Ultimately, the decision of whether to invest in pet insurance depends on the individual pet owner’s financial situation and risk tolerance. While insurance can offer financial protection, the high premiums and potential for exclusions mean that it’s not always a guaranteed money-saver. As a result, pet owners need to carefully consider the potential costs and benefits before making a commitment.
Interview with Emily Stewart
This story is based on a conversation between “Marketplace” host Kristin Schwab, and Emily Stewart.
