Is Investing in Pet Insurance a Smart Move?
Owning a pet brings immense joy and companionship, but it also comes with significant financial responsibilities. Unexpected veterinary bills can quickly become a major concern for pet owners. Emergency surgeries, for instance, can cost anywhere from $1,500 to $7,000, according to 2024 data from Yelp, while a single tooth extraction might run you between $500 and $3,000. Pet insurance offers a potential solution, helping to alleviate some of the financial burden of caring for your furry, scaled, or feathered friends.
To understand pet owners’ perspectives on pet insurance better, Experian recently conducted a survey of over 1,200 consumers.
Do Pet Owners Find Insurance Worth It?
Our survey revealed that only a minority of pet owners currently have pet insurance: just 29% of those surveyed. Price appears to be a major factor in this low adoption rate. According to the North American Pet Health Insurance Association, the average annual premium for accident and illness insurance is $383.30 for cats and $675.61 for dogs. Adding wellness coverage can nearly double that cost.
Despite the cost, a significant majority of insured pet owners find the expense worthwhile. Among those who have pet insurance, a striking 92% believe it’s worth the investment. One survey respondent stated, “I have pet insurance so I don’t have to decide between taking care of [my pets and] paying my mortgage.”
Even among pet owners without insurance, 53% recognize its value. This sentiment indicates that price is a primary barrier to entry for many pet owners. As one respondent noted, “Pet insurance would help us with unexpected pet costs [and] allow us to budget better.”
Types of Pet Insurance Coverage
Typically, three primary types of pet insurance are available:
- Accident-Only Insurance: This coverage is designed to protect against injuries from incidents like being hit by a car, insect bites, or ingestion of toxins. It usually excludes pre-existing conditions and preventive care.
- Accident and Illness Insurance: This type of insurance adds coverage for illnesses such as cancer, diabetes, ear infections, or urinary tract infections to the accident coverage. However, it typically excludes pre-existing conditions and routine preventative care.
- Wellness Coverage: This can often be added to the other plans to help cover routine vet visits and preventative care. This may include services such as dental cleanings, annual exams, and vaccinations. The specifics of each plan can vary widely, so careful research is crucial before committing to a policy.
The Impact of Pet Insurance on Veterinary Visits
While pet insurance helps cover a portion of veterinary expenses, policyholders typically pay a deductible plus a percentage of the bill. Also, you usually pay the vet upfront and then file a claim for reimbursement. Most plans reimburse between 70% and 90% of the cost of covered care which can lead to a substantial reduction in vet bills.
Pet owners with insurance tend to visit the vet more frequently than those without coverage. Half of insured pet owners surveyed reported taking their pets to the vet more than once a year, compared to just 20% of those without insurance. This pattern suggests that pet owners with insurance may be less likely to delay veterinary care due to cost concerns. Early and frequent vet visits can detect potential health problems early on when they are often cheaper and easier to treat. Regular preventive care can also help keep your pet healthy.
Financial Confidence and Spending Habits
Our survey found that pet owners with insurance generally spend more on their pets. Over half (55%) of those with pet insurance spend $100 or more on their pets each month. Conversely, just 24% of those without insurance spend this much. The increased spending among those with insurance may be due in part to insurance premiums. It could also be that they are more inclined to pursue necessary care knowing it’s covered, and are less resistant to treatment cost.
Survey responses also reveal that there is a correlation between financial confidence and pet insurance. Over one-third (41%) of pet owners who feel very or extremely confident about their personal finances have pet insurance. In comparison, only 22% of those who feel somewhat confident, and a mere 12% of those with little to no financial confidence, have the insurance.
The Bottom Line
While pet insurance can be costly, the majority of surveyed pet owners with the coverage believe it is a valuable investment. You can reduce the cost of pet insurance by carefully selecting coverage, choosing a higher deductible, and comparing prices from different providers. If pet insurance isn’t the right option for you, building a solid emergency fund, maintaining good credit utilization, and cultivating a strong credit score can provide alternative options for managing those unexpected veterinary bills.
Methodology
Experian surveyed 1,279 U.S. adult consumers to gather opinions on pet insurance. The survey was conducted on July 3, 2024. The sample was collected using a third-party company and was not drawn from Experian’s consumer credit database.
